A fossil is simply the naturally preserved remains or traces of animals or plants that lived in the distant past. Fossil can be varied...bones from a dinosaur, a shape in stone of a sea creature, an insect preserved in amber, a tooth from an extinct shark, or even a footprint of an extinct animal are all good examples of fossils.
Fossils are usually found in sedimentary rock. This is because sediments have to accumulate over the organism in order to preserve it. That is why most fossils are marine in origin or are land animals that fell into a water environment.
Other ways fossils can form are rapid burial (like volcanic eruption or mudslide) or sap from a tree oozing over an insect.