KML is a format for geospatial data. It's based on XML in the same way that GeoJSON is based on JSON: a KML file is a particular structure and kind of XML file. KML was created by Keyhole, a company Google acquired and turned into Google Earth, and is now maintained by Google and the OGC.
KML has some unique features, mostly by virtue of being designed with Google Earth in mind. It can store styles alongside geometry. It can store "flight paths" for automatically panning and sweeping through maps. KML files can also contain NetworkLink objects, which let them refer to other KML files that could be on the internet or local.