The term, tournament, originally referred to the meeting of two teams of knights in quasi-combat. It was commonly called "hastilude" ("game with spears") as against the joust which was a contest between individuals (although teams were often formed.) They were more sporting and social occasions than events designed for developing battle skills.
In England, especially as the great families of the realm grew closer towards armed conflict after the death of Edward III, they were disapproved of and even banned because of their cost and the propensity of many to carry the contest further than the field of competition. They had been associated with baronial disturbances during the reign of Henry III in the 13th century, enjoyed a resurgence under the bellicose Edward I and his chivalric-minded grandson, Edward III during the 14th (where a tourney was considered spectator sport and grand event where the pomp and glitter and considered as important as the actual contests and royal patronage was assured); were banned by Henry V and rarely held during the 15th. Henry VIII, secure in the unity of his nobles, brought the event back to life, but it was still more important socially than as war-practice.
Nowadays, tournaments can be held for any sport and even have media-driven tournaments for non-sporting activities like eating food etc. A tournament may be defined as any competitive activity in which a group of people take part and there is a clear winner - either person or a team. The closest modern analogy to the medieval tournament would be the great "grand slam" tennis events like Wimbledon where the social occasion is almost as commented upon as the play; and Formula One motor racing.