In the world of music, a compilation album is an album (music or spoken-word) featuring tracks from either a single or multiple recording artists, often culled from a variety of sources (such as studio albums, live albums, singles, demos and outtakes.) The tracks are usually collected according to a common characteristic, such as popularity, genre, source or subject matter. When the tracks are all essentially by the same recording artist, a compilation album is often referred to as a retrospective album. Compilation albums may employ traditional product bundling strategies.
In terms of computer gaming... see above! While there had been a few sporadic 'compilations' of new games (usually cheap type-ins or very basic copies of popular arcade hits (Pacman, Defender and Donkey Kong clones all being favourites...)), the modern understanding of a computer compilation tends to be the bundling of either some old games to give them a new lease of life or some new games that weren't felt strong enough about to sell on their own.
The general feeling was that compilations offered 'good value' with purchasers willing to let the odd poor title slip through either because of the sheer quantity of games or because they were effectively freebies being bundled along with a couple of quality titles.
Over the years a large number of compilations were produced on the CPC both for retail and as giveaways for magazines and clubs.