An Application is a logical collection of Targets.
A typical application could include a source code repository, a build artifact, a public website, a web server. Perhaps each piece has a corresponding environment like development (DEV), quality assurance (QA), user acceptance testing (UAT), staging (STG), production (PRD). If a customer decides to go in this direction then the average Application definition could contain 4-20 Targets.
An Application name should reflect the criteria on which the Targets were grouped together. For example, if they were grouped together because together all of the selected Targets represent an Application then the Application name should be that product / application name. Other criteria could be perhaps grouping Targets by development team, or all the Targets are directed by the same application manager.