A coilover is an automobile suspension device. "Coilover" is short for "coil spring over strut". It consists of a shock absorber (British: damper) with a coil spring encircling it. The shock absorber and spring are assembled as a unit prior to installation, and are replaced as a unit when the shock absorber has leaked. This provides for optimal damping without torsional loads. Some coilovers may be adjustable for ride height and stiffness, using a simple threaded spring perch similar to a nut.
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The coilover is a basic component of the MacPherson strut suspension system, which is distinguished from other arrangements by employing a particular design of anti-roll bar as a longitudinal constraint. This was the first widespread use of the coilover in automobile suspensions; but there are other designs. The word coilover should not be considered a synonym for the MacPherson strut arrangement.
Coilovers should not be confused with struts or independently mounted shock absorbers.
See this article for an in-depth explanation of coilovers and their function: http://www.pirate4x4.com/tech/billavista/coilovers/Part_1/
Source: wikipedia > coilovers.