A sandbox game is one in which most of the content after launch is created and/or controlled by the players.  In such a title the game will launch with certain content and missions/quests/story lines, and may have updated from the company with more such things.  However, the majority things like the physical space, economy, guilds/corporations/nations/faction, etc. are player-controlled and created.  A great example of this style game is EVE Online, in which there are missions and contracts to complete, but if you buy a ship off the market it was made by a player.  The only computer generated items in games like this are generally quest rewards, starting gear, and the raw materials you gather from resource nodes or player/NPC kills required to make the new items.