escrow is a financial instrument held by a third party on behalf of the other two parties in a transaction. The funds are held by the escrow service until it receives the appropriate written or oral instructions or until obligations have been fulfilled
On top of that, the escrow service can be arranged in a m-of-n multisig manner so that the fund doesn't need to be held by the escrow. In such setup, the buyer and seller can release the escrowed bitcoin themselves even when the escrow is gone.