Materials classified as "peer-reviewed" have been subjected to a heightened level of scrutiny prior to publication. The purpose of peer review is to ensure accuracy, integrity, and credibility on the part of the author(s). This process generally involves an editor distributing an unpublished manuscript for evaluation and review by several scholars in a relevant field. This process is referred to as peer review because the scholars conducting the review are considered to be peers to the authors of the work.
An individual tasked with reviewing the work of a peer is likely to focus on particular elements of the work, such as methodology, literature reviews, results or findings, and conclusions. They will also look for evidence of bias or other flaws in the reasoning of the author(s). Upon evaluation, the reviewers will decide whether to accept the manuscript as written, request that revisions be made as a condition for publication, or decline to publish the manuscript.
While the terms "scholarly" and "peer-reviewed" are related and are often used interchangeably, they actually have different meanings.
A scholarly journal is essentially a publication dedicated to providing researchers in a partciular field with an opportunity to report on original work and experimentation, but the articles published in a particular scholarly journal are not necessarily subject to peer review. Scholarly journals that do not make a practice of subjecting submitted articles to peer review as a condition for publication are less common than scholarly journals that require peer review, but such journals do exist.