From BR Bullpen
Catcher's interference is a situation where the catcher hinders a batter's ability to hit a pitched ball by touching his bat. The call is automatic as long as the batter was standing inside the batter's box, as it is considered the catcher's responsibility to place himself so as to allow sufficient space for the batter to swing the bat unimpeded.
When the interference occurs and the ball is put in play, the play is allowed to continue, as in a balk, in case the batting team gains more from the result of the hit than from an interference call; if it isn't the case, the call is made and the results of the ball in play are erased. When catcher's interference is called by an umpire, the ball is dead, the batter is awarded first base without ability to be put out, and baserunners will advance only if forced to (catcher's interference will often occur on stolen base attempts). The catcher is charged with an error and the batter is charged neither with an at bat or a plate appearance. A special notation is made in the boxscore that batter x was awarded first base because of catcher's interference.
The play should properly be called catcher's obstruction, as interference properly refers to actions by the offensive team, or by umpires or spectators, whereas obstruction refers to similar actions by the fielding team. However, the term has entered the standard baseball vocabulary and is described under interference in the relevant section of the official rules.