A sweatshop is a factory where workers are exploited and not allowed to unionize. You might not sweat in a sweatshop, but you probably work hard and under lousy conditions.
In a sweatshop, workers slave away in poor conditions for low pay. Sweatshop workers — who often make clothing — aren't allowed to form unions, so they cannot protest their poor working conditions. In repressive countries that aren't looking out for their citizens, you're more likely to find sweatshops. An American corporation that uses sweatshops overseas could find itself in a lot of trouble.