Correct answer: a law in a city or town that designates separate areas for residency and for business.
Zoning ordinance typically regulate what areas of a city or township can be used for residential purposes, and what can be used for commercial purposes. Within those two broad categories, there will also be subcategories. For residential zones, some areas will be designated for single-family homes and not allow multi-family units (like apartment buildings). For commercial zones, some will be designated for retail or restaurant or other such businesses, vs. areas set aside for industrial purposes (factories,distribution centers, etc). The creation of zones for churches or schools would be an example also..
Zoning laws did not always exist in the United States. One of the earliest examples of separating residential from commercial/industrial zones was in Los Angeles in 1908. The town of Euclid, Ohio, became famous in zoning law history, because a lawsuit by a realty company against the zoning ordinance that had been passed by the town made its way to the US Supreme Court (Village of Euclid v. Ambler Realty Company, 1926). The Court sided with Euclid's zoning law, saying that zoning ordinances are permissible as long as there is a demonstrated connection to public welfare.