A chronometer refers to a very select group of watches tested and certified to meet certain precision standards. The Swiss Official Chronometer Testing Institute (COSC), founded in 1973, is the official testing agency for Swiss manufacturers seeking this prestigious designation. Each officially certified COSC chronometer is unique, and identified by a serial number engraved on its movement and a certification number given by the COSC.
To qualify, a given movement is tested for 16 days, in 5 positions, at 3 different temperatures (8°C, 23°C, 38°C) and against 7 different criteria. Of note, the watch must not exhibit daily deviation of more than -4/+6 seconds.
The COSC only tests movements, not complete watches. Although you might assume that they are all mechanical, you would be wrong. Quartz watches make up 6 percent of chronometer certifications and are subject to more stringent accuracy tests.
In recent years, approximately 4-5 percent of Swiss watches produced, were awarded chronometer certification. Just over half were given to Rolex with Omega and Breitling making up another 25 percent of total certifications. This shouldn't be taken to mean that these well known watchmakers necessarily make the best movements: some watch manufacturers, such as IWC, have in-house movement tests that are equal to or exceed those required by the COSC.