From the Wikipedia:
"Historically, corporatism (Italian: corporativismo) refers to a political or economic system in which power is held by civic assemblies that represent economic, industrial, agrarian, social, cultural, and/or professional groups. These civic assemblies are known as corporations (not the same as the legally incorporated business entities known as corporations, though some are such). Corporations are unelected bodies with an internal hierarchy; their purpose is to exert control over the social and economic life of their respective areas. Thus, for example, a steel corporation would be a cartel composed of all the business leaders in the steel industry, coming together to discuss a common policy on prices and wages. When the political and economic power of a country rests in the hands of such groups, then a corporatist system is in place.
The word "corporatism" is derived from the Latin word for body, corpus. This meaning was not connected with the specific notion of a business corporation, but rather a general reference to anything collected as a body. Its usage reflects medieval European concepts of a whole society in which the various components - e.g., guilds, universities, monasteries, the various estates, etc. - each play a part in the life of the society, just as the various parts of the body serve specific roles in the life of a body. According to various theorists, corporatism was an attempt to create a modern version of feudalism by merging the "corporate" interests with those of the state.
It became popular during the rule of Getulio Vargas in Brazil during the 1920s and 1930s when issues of social welfare arose. He implemented a form that promoted what was then referred to as modern capitalism. Its objective was to be moderate, and not completely open to free markets.
Political scientists may also use the term corporatism to describe a practice whereby a state, through the process of licensing and regulating officially-incorporated social, religious, economic, or popular organizations, effectively co-opts their leadership or circumscribes their ability to challenge state authority by establishing the state as the source of their legitimacy, as well as sometimes running them, either directly or indirectly through corporations. This usage is particularly common in the area of East Asian studies, and is sometimes also referred to as state corporatism. Some analysts have applied the term neocorporatism to certain practices in Western European countries, such the Proporz system in Austria. At a popular level in recent years "corporatism" has been used to mean the promotion of the interests of private corporations in government over the interests of the public." (http://en.wikipedia.org/wiki/Corporatism)