A burl is a wartlike, deformed growth on the trunk or root and sometimes even the branches of a tree, caused by (1) an injury to, or (2) and infection in, the tree just under the bark, or (3) the existance of an unformed bud which has all the genetic material necessary to grow a full branch, or even a whole tree, but which for some reason did not grow properly.
Burl wood is usually darker than the rest of the tree and in some cases (Paela comes to mind) may be a significantly different color altogether. Because of the diverse grain direction, burl wood cannot be relied on for strength, but that's of little consequence since burls are prized for beauty, not strength.
http://www.hobbithouseinc.com/personal/woodpics/_figure.htm#...