The red herring is a term that used to deal mostly with mystery stories and thrillers. Thanks to the cross-genre-ization pollination that happens in today's publishing, red herrings now actually show up in pretty much every type of story.
A red herring is a deliberately misleading plot device that is designed by the writer to distract the reader from the actual clues for the book's narrative.
In the broader sense, a red herring is any plot device that purposely tricks the reader into thinking the book or narrative is going one way, when it is actually going another. A red herring in mystery stories is generally a clue found by the protagonist that is either wrongly interrupted by the reader or character or has nothing to do with solving the crime at all. In a romantic plot, the red herring could be an overheard conversation wherein the love interest describes his love for another woman that our protagonist overhears, not realizing he's talking about how much he loves hanging out with his sister (and not in an incest way).
In essence, the red herring is a tool of the writer's craft in which the reader is deliberately misled. This comes from the narrative tool of the willing suspension of disbelief. We allow the narrative to mislead us with red herrings because we have been programmed to believe that in stories, characters speak truly and act with some sort of recognizable motivation, unless told otherwise by the text. Writers exploit that belief to trick the reader in believing something false.
In more literary settings, the red herring could therefore be related to both more Modern ideas (like the tearing down of the artificial narrative to get closer to human experience) and the unreliable narrator, wherein the narrative's storyteller cannot be trusted at their word. These narrative tools all rely on using what the reader normally does when reading against them.