At the core of the matter, the "T" is simply used in text (and sometimes speech) to easily show the difference between a denominated chip with no value -- a '5' or '25' chip, for example -- from a denominated chip that represents an actual cash value and includes a currency symbol, such as "$" for Dollars (or a Cents or Euro symbol, etc.). The no-value denominated chips are denoted as T5 vs $5, representing Five Tournament Units vs Five Dollars in U.S. Currency.
Value chips such as $1, $5, and $25 are used in cash games (and are more accurately referred to as 'cash checks', not chips), since they are negotiable instruments that represent actual currency in the casino, similar to a bank draft check.
No-value chips such as '5' or '25' (represented in print/speech as T5 or T25) have no cash value, and are typically used in tournaments and other non-cash environments where the numbers on the chip merely represent theoretical 'units', not actual currency amounts.
In addition, as
@Eloe2000 noted above, the use of the no-value "T" nomenclature in print (or speech) can also be extended to include the sums of denominated no-value chips, such as a tournament starting stack that totals 10,000 units (a T10000 or T10K stack), which may consist of a varying number of different tournament chips with different non-cash values (perhaps 12 x T25 chips, plus 12 x T100 chips, plus 5 x T500 chips, plus 6 x T1000 chips, with the total sum of those quantities of those different units equal to 10,000 -- and also known as a 'breakdown' of that T10000 stack).
Reference to a T10000 tournament would be an event that used starting stacks equal to 10,000 Tournament units.
Reference to a T25-base set (or event) would indicate that the smallest Tournament unit chip in the set (or event) is equal to 25 units (aka a T25 chip).
And lastly, the increasing blind level amounts found in a given tounament blind structure are also referenced using Tournament units, such as T50/T100, T75/T150, T100/T200, etc. Each of those posted small blind and big blind amounts would consist of an appropriate number of tournament chips as needed.
For example, if using a T25-base set, posting a T150 big blind would require a player to use two T25 chips plus a T100 chip from his chip stack (which by that time has likely changed from his T10000 total starting amount of chips, due to previously posting blinds, making/calling bets, and winning/losing pots).
Clear as mud, eh?