Definition : The state of linguistic competence of a learner at a specific moment in time, which will show some but not full correspondence to the competence of a native speaker.
b) A learner's interlanguage may be characterised by features coming from his/her L1 - the use of grammatical patterns used in the L1, the use of false cognates, pragmatic features which reflect discourse features of the L1, the pronunciation of various sounds, intonation patterns etc.
A learner's interlanguage may at a certain point cease to develop in one or more areas. At that point the learner's competence is said to have "fossilised".
Interlanguage is associated with the work of Pit Corder in the 1970s. Pit Corder was Professor of Linguistics at the University of Edinburgh from 1964-1983, and was influential for his work on Error Analysis.
Interlanguage is also sometimes known by the term Approximative System
Recommended Reading
Pit Corder, S. Error Analysis and Interlanguage, OUP