As suggested by Mendel's principle of dominance, the situation wherein the phenotype of a heterozygote is completely identical to the phenotypes of the dominant homozygotes is referred to as 'complete dominance'. As opposed to this, 'incomplete dominance' is when the phenotype of the heterozygote is not completely identical, but instead, is an intermediate of the phenotypes of homozygotes.
Examples of Incomplete Dominance
The snapdragon species of flowering plant belonging to genus Antirrhinum, typically characterized by its bright flowers, is the best example of this concept. When a white homozygous snapdragon is crossbred with a crimson homozygous snapdragon, the end result is a hybrid snapdragon with pink flowers.
This can be attributed to the difference in the amount of red-colored pigment produced in each of the two subspecies. While a white homozygous snapdragon doesn't produce this pigment, red homozygous snapdragon does -- that too in copious amount. In case of the hybrid variety, the amount of pigment produced is half of what is produced in crimson homozygous snapdragon species.
Yet another example of incomplete dominance in plants is that of Mirabilis jalapa, a.k.a. the four o'clock flower or marvel of Peru. As with snapdragons, even in this plant the resultant species is pink in color when a red-flowering variety is crossbred with a white-flowering variety.
In animals, one of the best examples would be crossbreeding between the Rex rabbit species (known for its short fur) with the Angora rabbit species (known for its long fur.) Though not as short as the parent Rex species, the hybrid rabbit produced as a result of this crossbreeding sports short fur, which implies that the trait responsible for the Rex species' short fur coat is incompletely dominant on the Angora species.
Similarly, the crossbreeding between homozygous red bull and homozygous white cow, wherein the resulting offspring sports a roan or brownish coat consisting of a mixture of red and white shades, is yet another example of incomplete dominance in animal species.
Many sources also cite Andalusian fowl to explain the concept of inheritance. In this species, the homozygous is usually splashed white, black, or blue in color. A splashed white Andalusian cock has BB genes determining its feather color, while a black hen has WW genes determining its feather color. When they crossbreed, the next generation usually turns out to be blue in color; usually because the chances of this are 50 percent.
Though incomplete dominance in human genetics is not very common, it is far more interesting and simple to understand as compared to the same in plants and animals. A lot of research has been done on human hair and therefore, it isn't surprising that the same is our best bet when explaining this form of inheritance ... intermediate inheritance to be precise.
If one of the child's parent has curly hair and the other has straight hair, the chances of the child having wavy hair -- the intermediate between curly and straight, are the most. Other than genetic traits (like hair structure), certain diseases, like Tay-Sachs disease and sickle cell anemia are also associated with incomplete dominance.
While these examples must have given you a rough idea as to what incomplete dominance in genetics is, you should also get well-versed with other concepts of dominance, like co-dominance (which is often confused with incomplete dominance) and pseudo-dominance (which seems like complete dominance, but is not).