Prince2 Certification exam is an examination on PRINCE project management method. PRINCE is not related to the actual Prince but PRINCE stands for PRojects IN Controlled Environment.
PRINCE project management method was initially developed in 1989 by the Central Computer and Telecommunications Agency (CCTA) as a UK Government standard for information systems (IT) project management; however, it soon became regularly applied outside the purely IT environment. PRINCE2 was released in 1996 as a generic project management method. PRINCE2 has become increasingly popular and is now a de facto standard for project management in the UK. And probably that's why you are also here to know what it is.
The most current revision was released in 2005 by the Office of Government Commerce, and it is currently undergoing a refresh for 2008/09.