Demosaicing
The process of reconstructing a full-colour image from the single-colour samples recorded under a colour filter array.
In depth
Every pixel in the final image has two of its three colour values estimated from surrounding photosites. Good algorithms follow edges rather than interpolating blindly across them, which is why different raw converters produce visibly different detail from the identical file. It is the single largest source of variation between raw processors.
Examples in practice
The same raw file opened in two converters shows different rendering of fine branches against sky, purely from demosaicing.