A limitation in perception.
In solving problems, humans try to focus on the best strategy to reach the goal. Sometimes problems are more difficult to solve than they need to be because the available solutions are not clear or obvious. That is, humans form mental sets, ways of viewing the potential solutions, that actually hinder progress.
When people develop functional fixedness, they recognize tools only for their obvious function. For example, an object is regarded as having only one fixed function. The problem-solver cannot alter his or her mental set to see that the tool may have multiple uses.
A common theatrical situation involves a group of people who want to enter a locked room when they have no key. A solution often arises when somebody thinks to insert a credit card between the door and the door jamb, releasing the lock. In real life, if one needs to get into a locked room, a useful implement might be present that would help solve your problem. Unfortunately, the person may not recognize that it will help because he or she is a victim of functional fixedness.
In many cases, people are quite adept at avoiding functional fixedness, as when using a nail clipper as a screwdriver or the heel of a shoe as a nutcracker.