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A privilege escalation attack is a type of network intrusion that takes advantage of programming errors or design flaws to grant the attacker elevated access to the network and its associated data and applications.
Not every system hack will initially provide an unauthorized user with full access to the targeted system. In those circumstances privilege escalation is required. There are two kinds of privilege escalation: vertical and horizontal.
Vertical privilege escalation requires the attacker to grant himself higher privileges. This is typically achieved by performing kernel-level operations that allow the attacker to run unauthorized code.
Horizontal privilege escalation requires the attacker to use the same level of privileges he already has been granted, but assume the identity of another user with similar privileges. For example, someone gaining access to another person's online banking account would constitute horizontal privilege escalation.