What's a territory gap?

A territory gap consists of a dimension member that belongs to a territory but doesn't belong to any children of that territory.

In this chart the parent territory is defined by the size of the customer, and the available dimension members for customer size are small, medium, and large. There are child territories for small and medium sized customers, but the territory for large customers is missing and creates a gap.

A third child territory is required to fill the gap

For more details, see the discussion on Oracle Customer Connect: Reduce Admin Burden when Resolving Gaps and Overlaps using Territories Workspace.