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Sectors are regions in space accessed through transit gates.
Sectors are typically claimed by a specific faction. The bulk of sectors are claimed by major race governments: the Argon, Boron, Paranid, Split, and Teladi. Terrans are a recent addition to major race governments, claiming the Solar System sectors and Aldrin sectors. In addition many sectors are lawless tracts ceded to pirates such as the Yaki. Finally, there are the hostile factions of Xenon and Kha'ak which dominate certain sections of space.
A few sectors are so recently discovered they are unclaimed and listed as Unknown.
A graphical layout of sectors here: Universe map
The X3 wiki hosts its own listing of sectors and gates: All Sectors with Gate Positions