IIFE stands for: Immediately-Invoked Function Expression
It is a self-executing anonimous function like this:

    $.fn.myplugin = funnction(options) {
        var settings = {};
        $.extend(settings, this.myPlugin.defaults, options);
        return this;

    $.fn.myPlugin.defaults = {
        option1: 'option1',
        option2: 'option2',
        option3: 'option3'

Another good example

// Create an anonymous function expression that gets invoked immediately,
// and assign its *return value* to a variable. This approach "cuts out the
// middleman" of the named `makeWhatever` function reference.
// As explained in the above "important note," even though parens are not
// required around this function expression, they should still be used as a
// matter of convention to help clarify that the variable is being set to
// the function's *result* and not the function itself.

var counter = (function(){
  var i = 0;

  return {
    get: function(){
      return i;
    set: function( val ){
      i = val;
    increment: function() {
      return ++i;

// `counter` is an object with properties, which in this case happen to be
// methods.

counter.get(); // 0
counter.set( 3 );
counter.increment(); // 4
counter.increment(); // 5

counter.i; // undefined (`i` is not a property of the returned object)
i; // ReferenceError: i is not defined (it only exists inside the closure)

Source: http://benalman.com/news/2010/11/immediately-invoked-function-expression/