Functional testing is a quality assurance (QA) process and a type of black box testing that bases its test cases on the specifications of the software component under test. Functions are tested by feeding them input and examining the output, and internal program structure is rarely considered (not like in white-box testing). Functional testing usually describes what the system does.
Functional testing does not imply that you are testing a function (method) of your module or class. Functional testing tests a slice of functionality of the whole system.
Functional testing differs from system testing in that functional testing "verifies a program by checking it against ... design document(s) or specification(s)", while system testing "validate[s] a program by checking it against the published user or system requirements" (Kaner, Falk, Nguyen 1999, p. 52).
Functional testing has many types: