One of two or more words pronounced alike but different in meaning or derivation or spelling.
The words wood and would are familiar homophones.
Since phon- means "sound," homophones basically sound the same. Tide and tied, made and maid, horse and hoarse are pronounced identically, but differ in meaning, derivation, and spelling. This occasionally leads to confusion. If Groucho Marx had said "I'm a little hoarse," we might well have expected him to give a little whinny. Puns depend on homophonic pairs for their effect; while many find that homophonic humor grates, others think it is just great.