A link farm is a group of sites whose main purpose is to create links, either to each other or to anyone who pays. They often have thin content on unrelated topics, many outbound links per page, and "write for us" or price lists front and centre.
Search engines are good at spotting these networks. Links from them are usually ignored, and in bad cases can lead to a manual action.
When prospecting, skip sites that publish anything for a fee, have no real audience, or link out to casinos, CBD and similar on most pages.
Example
A site with 400 articles on everything from crypto to pets, each with three outbound links and a "guest post: $50" page, is likely a link farm.
Putting it into practice
Where to use it: How to choose sites to pitch and Disavow file generator.