A story, poem, or picture that can be interpreted to reveal a hidden meaning. Normally with a literal meaning and a interpreted meaning.
Example: The Road Not Taken
Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth;
Then took the other, as just as fair,
And having perhaps the better claim,
Because it was grassy and wanted wear;
Though as for that the passing there
Had worn them really about the same,
Allegory is used in the poem to create the idea that the speaker must make a choice of which path to take. However the two paths that the speaker can choose to go down obviously represent a decision the speaker has to make during his life and would be very difficult to be interpreted differently.