Orientalism is a term scholars use to describe the romanticization of the Near and Far East, usually by projecting the desires generated by our disillusionment with the modern Western world onto an exotic, foreign tableau. In this sense, the Orient is viewed as the antithesis of the West, either as a purer, more spiritual, timeless place waiting for Westerners to come and discover themselves, or as a confusing, untamed, and irrational place where Western norms break down. Much like the dichotomy of the Noble Savage/Cannibal in the Western imagination of the New World, both rely on stereotypes and placing the foreign into Western mental categories.
Orientalism arguably goes back to the ancient Greeks, who emphasized the foreignness of their Persian adversaries. Modern orientalism is a product of the Age of Exploration, the Enlightenment, and went hand-in-hand with imperialism. It continues to inform many of our views of the East. It is important to understand it as a cultural process because it so often limits our ability to understand Asia on its own terms. While these misunderstandings aren't always harmful, it is important to realize that they are there, and that just as we approach the foreign with our own mental toolbox, the foreign also approaches us with theirs'.
This article from NPR describes orientalism using examples from modern cinema, including the new film Eat, Pray, Love.