Lolicon, or Rorikon is the Japanese gairaigo term (usually short form) for Lolita complex (derived from the novel Lolita), the sexual attraction to fictional and real underage girls, or ephebophilia. (Strictly speaking, Roriita-konpurekkusu in Japanese means only psychological tendency of an adult man or older boy; rorikon, however, additionally implies persons who have such psychological tendency. This difference is important.)
Lolicon usually involves female characters between the ages of 8 and 13 (sometimes, between 3, 4 and 17, 18 in Japanese rorikon.) Lolicon manga are legal in Japan (so long as actual underage models are not used in the creation of the art); actual child pornography is not. Despite Japan producing (and consuming) most lolicon media, there is no evidence that it causes violent crimes against children and teens. Their prevalence (as is the case for violent crimes in general) is well below that of most other developed countries.
Lolicon art is a frequent subject of scholarly articles on sexuality in Japan, and is often suggested to exist in Japan for the same reasons that adult women in high-school uniforms are considered attractive, and enjo kosai is popular. In many non-pornography-specific bookstores and newsstands in Japan, lolicon media is almost freely available for browsing and purchase except for some limitations such that in addition to adult comics, rorikon comic books shall be exhibited in the limited places inside stores etc.
Lolicon is frequently accused of being similar to or a form of paedophilia, particularly by westerners. Defenders of lolicon say that fictional material does not adversely affect children, and may in some cases help to relieve the sexual tension of actual paedophiles; opponents often say that the existence of fictional material encourages the viewing of children as sex objects. Another point of note is that the children depicted in lolicon do not have realistic proportions for their age, more closely resembling older females on a smaller scale.
Toddlerkon is another western term; it is essentially lolicon that depicts girls younger than those in a typical lolicon manga/drawing, typically infants and toddlers (hence the term "toddlerkon"). Because many aficionados of lolicon find it distasteful and offensive, this sub-genre was created in an attempt to distinguish it from ordinary manga/drawings that focus on older prepubescents.
A somewhat related subject is furry porn or "Yiff"/"Yiffy", which is art that depicts anthropomorphic animals ('furries') in sexual situations. The specific type in question features furries of both genders that are underage, or presented as children, and is referred to in the fandom as 'cub porn', after the word used to describe the young of many species of animal. This particular genre is generally marginalized by the fans of mainstream pornographic artwork, even more so than lolicon or shotacon.