A decoupling capacitor is a capacitor used to decouple one part of an electrical network (circuit) from another. Noise caused by other circuit elements is shunted through the capacitor, reducing the effect they have on the rest of the circuit
An alternative name is bypass capacitor as it is used to bypass the power supply or other high impedance component of a circuit.
the bypass capacitors are used with (slow varying) signals in order to filter out the high frequency noise where as the decoupling capacitors are used to filter out noise in power line, for example each ic in a circuit could be working at different frequencies and drawing different powers, these would cause variation in VCC ( at high frequencies) as the power traces also have resistances. Decoupling capacitors reduce the effect experienced by the neighbouring ICs. In contrast the bypass capacitor is used with signals and decoupling capacitor is associated with power supply