Web farm is a group of servers that share the load of handling web requests. In a simple system design, a single server typically supports all application requests. However, as the number of requests to your server increases, the less capable your server becomes in processing all requests. The most common way to solve this problem is to use multiple servers that host the application together. Doing this enables you to balance the traffic between the available servers rather than relying on a single server to fulfill them all.
There are many advantages of using a web farm, one of which is high availability. If a server in the farm goes down, the load balancer redirects all incoming requests to other servers. A web farm also improves performance by reducing the load each server handles, thus decreasing contention problems. The ability to add in servers to the farm also provides better scalability.
Source: Exam Ref 70-486- Developing ASP.NET MVC 4 Web Applications