A perimeter (or “peri” for short) in Technical Minecraft refers to a large area of blocks that has been cleared of its normal terrain, usually either by hand-digging or by using a world eater. Perimeters can be made with purely practical applications in mind, though it’s common to build decoration (a “deco”) to go along with it, usualy covering the floor, walls, and any farms or other builds inside the perimeter.
The shape of a perimeter (when viewed from the top down) is usually either square or rectangular, as those are the easiest ones to carve out with world eaters, though perimeters that are either partially or fully hand-dug are often more intricately shaped as to fit with the decoration. The name stems from the colloquial usage of “perimeter”, which usually refers to the distance around the outline of a 2d shape, though in TMC it usually refers to the hollowed out space itself.
Perimeters usually serve one or two purposes: to prevent mob spawning, and/or to reduce lag.
The spawn chunks are a common place to see perimeters, as they will be loaded any time the overworld is loaded, meaning any performance saved here will give more leeway to any other farm that loads the overworld.
It is also somewhat common to see a small chunk grid around a nether portal chunk loader be turned into a mini-perimeter. While there may not be any player near enough to let hostile mobs spawn, there’s still a chance of passive or ambient mobs wandering into the chunkloader’s range, taking up space in their respective mobcaps.
The first known perimeter to be constructed was on the ZipKrowd server. They wanted more efficiency from their quadruple witch farms, so they decided to remove all of the blocks around the AFK location, where other mobs may be able to spawn and fill up the mobcap. Perimeter creation has become significantly easier since the advent of movable TNT duping