A sage (仙人, Sennin or セージ, seijin) is someone who is able to utilize senjutsu (仙術, Sage Techniques), and has mastered the art of Sage Mode. "Sage" can also refer to an individual renowned for their great power, wisdom, or holy standing.
Senjutsu
Main article: Sage Mode Main article: Senjutsu Senjutsu (仙術, Sage Techniques) refers to a specialized field of jutsu that allows the user to sense and then gather the natural energy around a person. Senjutsu practitioners can then learn to draw the energy of nature inside of them blending it with their own chakra (created from spiritual and physical energy within the shinobi), adding a new dimension of power to the Sage's chakra, resulting in the creation of "senjutsu chakra" (仙術チャクラ, senjutsu chakura). Those who are untrained in senjutsu cannot sense senjutsu chakra, or the natural energy needed for its creation.
This new chakra enables the user to enter an empowered state called Sage Mode, which can then drastically increase the strength of all ninjutsu, genjutsu, and taijutsu. A person who is able to use senjutsu is called a sage (仙人, sennin) when taught by the toads of Myobokuzan or Seijin (セージ), which also means sage, when taught senjutsu in the Seijin Order.
Trivia
The term 仙人 (Sennin), refers to the Japanese term of Chinese sages and practitioners of Taoist ways, who have gained immortality and incredible powers through the manipulation of qi, or natural energy through their body by becoming ascetics and living on mountains, where qi is said to gather at the most and to start flowing from into the world. The training and measures needed to become a Sage in Naruto is just as vigorous and demanding, and similar in some regards, requiring one to have massive reserves of chakra, and come to adopt natural energy, not for the pursuit of immortality, but to become harmonised with the flow of the world around them.