From BR Bullpen
Foul territory refers to the part of the field that is outside the foul lines but in play. It is located to the left and to the right of the playing field and behind home plate; its outer limits are the seats and other barriers that define the field of play. The opposite of foul territory is fair territory.
A fly ball hit in foul territory is in play and can be caught for an out; baserunners can advance as on any other fly ball out. If it drops to the ground, it is simply a foul ball, and runners cannot advance. A ground ball hit in foul territory is simply a foul ball, and cannot be played. An error can be charged on a catchable ball hit in foul territory that is dropped, even though the batter does not reach base and the runners cannot advance: the mere fact of the at bat being unduly prolonged is enough to merit the error. Thus, a pitcher may pitch a perfect game in spite of his team being charged with an error, if the error occured under such circumstances.
In certain cases, an outfielder will deliberately let a fly ball hit deep in foul territory fall to the ground even if it was catchable, in order to prevent a sacrifice fly. In this case, no error is charged and the at bat continues as if the ball had been hit into the stands.
The size and shape of foul territory varies greatly from ballpark to ballpark. As a rule of thumb, the greater the amount of foul territory, the more a stadium is favorable to pitchers, as foul pop-ups that would fall harmlessly into the stands in other stadiums become outs. Boston's Fenway Park is known for its notoriously small foul territory, particularly in the outfield along the two foul lines. The old Memorial Stadium in Baltimore, MD, and Network Associates Coliseum in Oakland, CA are two stadiums with very large amounts of foul territory.