"Digital" is typically contrasted with analog. In an analog world quantities aren't exact. More precisely, they may be exact but they can't be stored or processed exactly. The physical world as we experience it is, in general, analog. Your car is never going *exactly* 50 miles an hour. The seasons are not clearly delineated. You can tell me that you're mad about something, or that you're curious, but you can never fully explain what it's like to be you. The richness and nuance we see in the world, the stuff that you can never exactly capture but that makes the experience complete, is analog. "Digital" information, on the other hand, deals with absolutely precise representations, sometimes artificially precise. In a computer image file, a majestic landscape is reduced to a finite array of pixels, each of which assumes one of a fixed set of allowed colors. A higher-resolution image has more pixels, but it will never have the infinite detail of the real landscape. Digital is a trade off - you lose the richness of the real thing, but what you have left is absolutely, 100% precise, and it can be stored, copied and modified while still remaining pristine. There's one critical distinction to make : digital versus discrete. A single pixel is discrete - there is only a finite number of colors it can have. But JPEG files aren't like that. They are a system for combining many pixels together in a way that give more and more resolution. It will never be analog, but there is a systematic way to increase the resolution.
Before transistors, humans' first digital revolution was language. There is certainly a lot of analog nuance in speech, but it is layered on a purely digital framework of words and sentences. Human language isn't like the grunts and calls of other animals, of which there are only a finite number. It's like JPEGs; if you're willing to add more words, you can say something that's more and more complex. This digital system seems to be the "special sauce" that makes our cognition different from animals' - or more properly, it's the mental module we have that they don't (most of what goes on in our heads is pretty generic as mammals go).