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Self-Efficacy, coined by Albert Bandura is a person's belief in his or her ability to complete a future task or solve a future problem. For example, if a person believes he is a brilliant scientist and can complete any scientific experiment, he has a high self-efficacy in science because he believes in his competency to perform a future experiment. Whether it is true that he is brilliant in science or not doesn't really matter. It only matters what he believes.
Self-Efficacy can also influence your goals, actions, and successes (or failures) in life. If your self-efficacy in an area is much lower than your ability, you will never challenge yourself or improve. If your self-efficacy in an area is much higher than your ability, you will set goals that are too high, fail, and possibly quit. The ideal self-efficacy is slightly above a person's ability: high enough to be challenging while still being realistic.