Scanlation, sometimes referred to as scanslation, is a term used for manga which has been scanned and translated by fans from its native language (usually Japanese or Korean) to a Western language, commonly English, French or Spanish.
Scanlations are generally distributed for free via the Internet, either by direct download, BitTorrent or IRC.
Reasons for scanlations
At first, scanlations were undertaken as fan projects because there were no official releases in the West, and it was hard to get manga imported. Friends living in Japan would scanlate a manga for a friend. What may have started out as a favor became a project, and grew from there.
Some people today do so simply because they want to see their favorite manga uncensored, which has occurred especially for manga that is aimed at a younger audience, such as the popular Dragon Ball series. The "Dragon Ball" portion of the manga released in North America is now released uncut due to fan demand. Recently virtually all new anime is fansubbed and most of it licensed by companies around the world. However due to sheer number of manga series in Japan, this will probably never be the case for manga. Scanlations are often done to translate manga to a language it never would be in otherwise.
Legal and ethical issues
By the letter of copyright law (such as the Berne Convention), scanlation is illegal. However it is almost never prosecuted. Like fansubbing, it is viewed by many fans as an ethical way to read manga which has had no official translation published in their own language.
Most scanlators, like fansubbers, stop distributing scanlations for manga that have been licensed, and advise fans of the manga in question to buy the official translation. Nevertheless, many people are of the opinion that scanlation is no different from piracy and always unethical because it is illegal. According to Yu's Behind the Scenes of IRC, there have been beliefs that "there is a gap between people's opinion and what is written in the law."
Copyright holders generally do not request scanlators to stop distribution before it is licensed in the translated language; thus, scanlators feel it is relatively safe to translate and scan such manga.
The license companies (such as TokyoPop and Viz Communications) have used the response to various scanlations as a factor in deciding which manga to buy licenses to translate. Said TokyoPop's Steve Kleckner in regards to scanlation, "And, hey, if you get 2,000 fans saying they want a book you've never heard of, well, you gotta go out and get it."
Scanlation Community
The scanlation community is similar to the fansubs community and the video game fan translation community. Those with slower internet connections may find it easier to download manga than anime episodes due to smaller file sizes. Some scanlation readers fear their favourite series will be licensed and be poorly translated or censored by the licensor. Others hope that the fanbase generated by the scanlation will encourage licensing of the work so they can purchase english-language tankobon books of the manga.
Reference
Manga Nation - SF Gate