Paper used for wrapping items, such as gifts or parcels. A common everyday noun.
プレゼントをきれいな包装紙で包んだ。
I wrapped the present in pretty wrapping paper.
包装紙 is the more formal, commercial term for wrapping paper, while 包み紙 is the everyday word used for gifts and small parcels.
包装紙 is the native Japanese term for wrapping paper used for gifts or parcels, whereas ラッパー is a loanword with a more casual, everyday feel.
Compound of 包装 (wrapping, packaging) + 紙 (paper).