A character set is the mapping of specific set of characters to binary values. In 8-bit character sets like ASCII, the values range from 0-255 and one character will be mapped to each (or most of) these values. This means that if your terminal is set to support a particular character set, every time you press a certain key, that key will send its value eg: 65, to the terminal, which will interpret that value as the letter A. It can also be known as an encoding scheme. Microsoft and IBM have traditionally called it a code page.
The query to check the characterset of your Oracle database is:
select value from NLS_DATABASE_PARAMETERS where parameter='NLS_CHARACTERSET';
To enable your E-Business Suite instance for multiple languages, the characterset should be set to UTF8 or higher.