An area of memory (RAM or disk based) for which to perform operations.
In programming, a workspace is an area of memory (RAM or disk based) for which to perform operations.
For example, this is similar to an area on a disk set aside to process files.
This is usually a copy from a master in which operations can be performed and potentially undone before committing to storage.
A workspace is (often) a file or directory that allows a user to gather various source code files and resources and work with them as a cohesive unit. Often these files and resources represent the complete state of an IDE at a given time, a snapshot. Workspaces are very helpful in cases of complex projects when maintenance can be challenging. Good examples of environments that allow users to create and use workspaces are Microsoft Visual Studio and Eclipse.
Reference: Wikipedia