Circumstance Bonus

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A circumstance bonus is a bonus that can be awarded by the GM to any action performed by a character or creature who has gained some advantage over their target, usually by being in the right place at the right time. As you can imagine, this covers a LOT of territory, but one of the most frequent sources of a circumstance bonus is a +1 bonus to-hit when attacking from a position of higher ground (note that the specific definition of what is, or isn't, higher ground is left up to the GM, and the attacking creature must still be able to reach their target, so the ground can't be TOO high...)
Other opportunities for circumstance bonuses can sometimes come from spells which alter your terrain, or the ability for a creature to perceive you (such as Invisibility (Sorcerer/Wizard Spell)). In such cases, it isn't really the spell that is providing the bonus, but the lingering effects of the spell. (When the spell causes the bonus directly, it's nearly always an Arcane Bonus or a Divine Bonus).
While some spells, feats, and skills may specifically grant a circumstance bonus when used appropriately, the GM is also free to issue circumstance bonuses (and, indeed, should do so), when the situation warrants it, and no other bonus is obviously available to use.
Unlike nearly all other bonus types, multiple circumstance bonuses to the same action are added together.