A Collective is a term referring to the connection created when a large number of beings magically pool their powers together. Whilst this term could refer to the connection between any number of being it is generally reserved for groups of six or more, with the Power of Two, Three, Four & Five being the terms used for smaller groups. Many beings have been known to be part of a collective, including the Avatars, Gods, the Zodiacs and the Titans. The demon Vicus also founded a collective, recruiting magical children that he had turned evil.
The magical connection forged in the formation of a collective intimately links the state of each member to all the others, which has a variety of effects & uses, and can be both detrimental and beneficial.
The most prominent effect is that each member of a collective shares their magical power through this connection, so that each member is only as strong as the sum total of all their magical powers combined. The more magical power is added to a collective (either through recruiting new members or by existing members gaining new powers) the stronger every member becomes. However, the reverse is also true: the more magical power is subtracted from a collective (such as through secession or death of its members) the weaker every member becomes, too.
Another limitation to such power-pooling is that, whilst the individual magical powers of each member will be bolstered by combined power of the collective, members cannot actually use specific powers unique to other members. For example, one cannot utilize another member's ability to read minds if they themselves lack that power. Nevertheless, members of a collective are still many times stronger than they would be alone.
The magical connection shared by each member of a collective can also allow contact between members, even when they would otherwise be isolated. For example, Phoebe manages to use a variation on the spell Dominus Trinus to open a channel of telepathic communication between her two sisters, along the magical connection afforded to them by their Power of Three (a type of collective), even though each sister was in a separate dimension altogether.
However, the linkage between the states of each members of a collective can be a drawback sometimes, as whatever affects one has the potential to affect the others. A good example of this was in the episode "Bride and Gloom", where despite only turning one Charmed One to the side of evil with magic, the other two soon followed as the spell spread to them through their magical connection.