In short
A non-conformity (NC) is the failure of a product, process or system to meet a specified requirement.
Non-conformities can be found at incoming inspection, in production, from customer complaints or in audits. They are recorded, affected product is segregated and a disposition decided: rework, concession, scrap or return.
For recurring or critical non-conformities, root-cause analysis and corrective action (CAPA, 8D) are launched.