This is the heart of downtown Chicago. This is the business center of the city without question, where many of Chicago's (and America's) largest corporations are headquartered, such as Bank One, Boeing, Wrigley, and Walgreens.
All of Chicago's addresses are based on a grid system - the north, south, east and west directional orientation are found in every address in the city - which is where the terms "Northside", "Southside", etc. come from. Ground zero for this system is the intersection of State and Madison Streets.
The term "The Loop" comes from the actual loop that is made by the elevated train (the "el"). As the "el" winds its way around downtown, it follows the tracks surrounding the loop: Franklin Street to the west, Lake Street to the north, Wabash Avenue to the east and Van Buren to the south. While these are the actual confines of the train's loop, locals consider the neighborhood to stretch a bit further - the Chicago River to the north, Lake Michigan to the east, the Congress Expressway to the south and the south branch of the Chicago River to the west.