I don't know that there's a specific name for it, but it's pretty simple…
The world is broken up into chunks, I believe these are 64x64 in Minecraft… So you really only need to see the current chunk you are in, and the 8 surrounding chunks (view distance will prevent you from seeing more than that).
So, whenever a player enters a new chunk… You load the 8 chunks around it, and if one doesn't exist (hasn't been generated yet), you generate it. This keeps the world around the player always available… Also any loaded chunks that are no longer immediately around the player location get unloaded (they are saved so they don't have to be regenerated next time they are needed).