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Gouache, a French term meaning "opaque," is simply opaque watercolor paint. Its brightness comes from the color itself unlike transparent watercolor, which gets its brilliance from the reflective qualities of the paper. Gouache can be used thinly, like transparent watercolors, but it is generally used as a matte, opaque paint. Gouache provides an actual paint layer, while transparent watercolor is a stain. Often referred to as "body color," the film of gouache appears thicker than it really is.
What It Is
Gouache is made from pigment, binder (usually gum arabic) wetting agents, other minor additives, and a preservative. More pigment is used in making gouache than transparent watercolors, which makes them opaque. An opaque extender (aluminum hydrate, blanc fixe, or precipitated chalk) is also added to the transparent pigments to make them even more opaque and improve the handling qualities. Precipitated chalk is added to some of the duller pigments to brighten them. It is best to use professional grade paints; cheaper gouache paints are made from inferior ingredients, tend to crack, and are not as permanent as high grade paints.

To ensure that the painting will last a long while even longer than an oil painting use quality gouache on an acid free paper and display it unvarnished behind glass. There is nothing in gouache that will yellow. Of all the mediums available, there is nothing that compares with the opacity, quick drying time, and ability to achieve minute detail as gouache.
Gouache is available in tubes and cakes, but cakes are neither as bright nor as practical as the tube colors.
A Brief History
The history of gouache is hazy at best. Ancient Egyptians, Greeks, and Romans painted with the precursor of modern gouache. During the Middle Ages it was used to illuminate (illustrate) manuscripts. The masters often used white gouache to highlight their drawings, which were done on toned supports. Between the 16th and 18th centuries, gouache was popular for miniature painting. During the 18th century, it was used by watercolorists in Italy, France, and Switzerland. In the 19th century, gouache was used in conjunction with traditional watercolors for special effects. Great artists who have used gouache include Dürer, Van Gogh, Poussin, Toulouse Lautrec, Picasso, Miró, Rouault, and Shahn.