The FABRIC OF SPACETIME
What does the question and the concept mean?
It's not a scientific question, there is no such term as fabric in physics. Rather, it is a generic conceptual question meaning a few things:
1) QUANTUM GRAVITY: What is its microscopic structure?: what is spacetime made of? What is it's fine structure, as if you looked from close up, as a surface, a fabric? What is it that is interwoven that makes it be what it is?
2) GRAVITATION: What of it's dynamics?: How does it behave and why? What are its mysteries and strange ways by which we see objects moving and changing?
2) COSMOLOGY: What is it's large-scale structure?: How does it look in the large, from a distance? What makes it be anything more than an empty canvas on which matter and energy travel and interact?
The term fabric tends to be inspired by the first question -- what does it look like when you look close up?. But if you pull away from looking at the fine fabric, you see the astrophysical regime of stars, galaxies and clusters, and as you see from further away you see the universe in its larger scales. You may also wonder if there are more universes. All of these have to play into each other, so they need to be related. At this point in our understanding of the physics of spacetime, we know better how to try to answer questions 2 and 3. Those can be for the most part (but not fully) explained by General Relativity (GR) which explains Gravitation, and the more or less known physics of classical mechanics, electromagnetism and thermodynamics, along with the modern physics of quantum mechanics (QM), quantum field theory (QFT), and the Standard Model (SM) of particle physics, which together explain atoms, electrons, protons, neutrons, photons and other elementary particles.
The first question, about spacetime in the small is harder, we have no real data about gravity at distances smaller than maybe about 1/10 of a mm, where Newtonian gravitation still seems to hold. And have not been able to explore the even smaller distances that require energies much larger (some think maybe not that much more, if there are extra dimensions of certain sizes) than what we can produce in the LHC, our most powerful particle accelerator.
So, really, it's a big question. The easiest way to get a grip is to first simply bring in what we do know. That's part of the answer to questions 2 and 3. It gets more speculative, and strange, for question 1.
A good reference for spacetime is in the wiki link here
As Heather described in her answer, spacetime is like that 2 dimensional fabric we see bent or deformed in many popular descriptions, like the figure below, except it is 4 dimensional -- well, she makes clear that's very different. That's why she says to try to wipe that figure from your mind, it's the 4 dimensions that makes it real and true. The sheet doesn't bend down below the earth in reality -- the earth resides in that 4 dimensional spacetime, and actually moves through it, both in the space dimensions, and evolves to the future as time goes on. In 4D we see its time history of it, its so called worldline. We can't draw on 4D, but in we can ignore one of the spatial dimensions, and draw a spacetime diagram in 3D, as the next figure shows.
The earth does in fact deform the 4 dimensional spacetime. The next figure helps a little visualize the paths of light rays and see their deflection due to gravitation.
But as Heather said, it is really 4D, and it's hard to visualize. And as Countto10 says, it can be pretty complicated.
So WHAT IS GRAVITATION, as described by GENERAL RELATIVITY?
It's the 4D spacetime, along with equations that relate the geometry of spacetime to the distribution of matter-energy in that spacetime. It's an equation like,
that determines (partially, some initial or boundary conditions or symmetries which define the context are needed to get a unique solution) the geometry of spacetime. From it one can solve for the metric, $g_{\mu\nu}$, which completely defines the geometry (the R terms on the left hand side are functions of the metric and its derivatives up to second order). For this one obtains all the solutions like Black Holes, gravitational waves, and the orbits of the planets and stars.
But, WHAT OF THE MORE EXCITING AND OUTLANDISH PICTURES LIKE THE UNIVERSE EXPANDING AND WORMHOLES CONNECTING DIFFERENT PARTS OF SPACETIME?
Well, yes, for that we have to do more work. WE have to solve the equations that describe the evolution of the universe (with the help also of the equations for the matter-energy on the right hand side). And it is done, and results in the Lambda-CDM concordance model, with the universe expanding and as we now know accelerating, and the Cosmic Microwave Background coming from when radiation was let loose 380,000 years after the Big Bang. See for that the chronology of the universe at the wiki article here
As for wormholes, they are hypothetical structures of spacetime that would connect one region of spacetime with another very far away. They've not been seen, are theoretically unlikely but possible if we had exotic material (negative mass , other possibilities), also not seen. See wormhole in the wiki article at https://en.m.wikipedia.org/wiki/Wormhole
And WHAT OF THE QUANTUM PICTURE OF THE FABRIC IN THE SMALL, THE MICROSCOPIC VIEW?
Well, it's more speculative since we still don't have an accepted theory of gravity at very small distances and very high energies. Two most cited theories are string theory and quantum loop theory. In one way or another it leads to a highly dynamic high energy submicroscopic spacetime, bubbling and changing, and somehow causing what we see as spacetime now to emerge. See .
Another factor that comes in and is still possibly in play is multiple dimensions, with perhaps 6 really compacted dimensions at every 4D spacetime point, such as the Calibi Yau manifold .
There's other variations with large higher dimensional spacetime membranes. See String Cosmology here
WHAT'S THE FABRIC OF SPACETIME?
It's some unknown combination of those and a few others. We're still trying to figure it out.
Figure and Link References:
https://en.wikipedia.org/wiki/Spacetime
https://i.sstatic.net/2fthm.png
https://i.sstatic.net/GmLd2.png
https://i.sstatic.net/pYYeY.gif
https://i.sstatic.net/9MjYs.png
https://en.wikipedia.org/wiki/Chronology_of_the_universe
https://i.sstatic.net/lD8Sk.png
https://i.sstatic.net/HNvwF.png
https://en.wikipedia.org/wiki/String_cosmology