A drop cap is a large, uppercase letter used for decoration in the opening of a piece (or section) of text, most often employed in editorial scenarios. It’s a direct descendant of the “illuminated” initials that originated in hand-lettered (pre-type) bibles.
When typesetting drop caps, the font size of the drop cap is often dictated by its alignment to the baseline grid; a harmonious setting will have the character effectively taking up the space of two, three, four, or even five lines of paragraph text.