A domesticated ruminant (Ovis aries) of the cattle family with a thick woolly coat and (typically only in the male) curving horns. It is... A wild mammal related to this, such as the argali and bighorn.
Sheep refers to a domesticated animal with a thick woolly coat. It is kept for its wool and/or meat, and is proverbial due to its tendency to follow others in the flock. Sheep were domesticated approximately 10,500 years ago. Read on about this from archaeology.about.com/od/shthroughsiterms/qt/Sheep-History.htm.
The word is sometimes used to describe people who don't know how to think for themselves and just wander through life being led by the popular agenda of those who promise easy grazing. Sometimes referred to as sheeple :)
Since you ask in the books section, I guess you don't want to hear about wool producing animals. In literature sometimes a spineless, easily controlled mass of people is called sheep, like gipsyrose explained. A good example is John Brunner's sci-fi novel "The sheep look up", in which the US population is controlled by the government through "war against terrorism" propaganda. Sounds familiar? But the book was written in the late 60s.