A steamship propelled by paddle wheels. This is a technical or historical term; in modern contexts, 外輪船 (がいりんせん) is more common.
In the 19th century, paddle steamers operated on many rivers.
Compound of 外車 (がいしゃ, 'paddle wheel') + 船 (せん, 'ship'). The exact historical derivation is uncertain, but the term directly describes the vessel's propulsion method.