Sphoṭa is a theory of the fundamental way in which language carries meaning developed by Indian grammarians. This theory is applicable to all forms of Indian philosophy whether they have a theory of knowledge being fundamentally based in language or not.
In language, neither words not sentences seem to carry meaning on their own. In India, philosophers became more and more convinced that the mere concatenation of letters, sounds and words could not carry meaning. Instead, there must be an element of language which gives a series of sounds their meaning. This element from which meaning bursts forth is called Sphoṭa. The grammarians who introduced the theory of Sphoṭa were opposed by several groups of realist philosophers.
Nyāya and Mīmāṃsā philosopher hypothezised that when a stream of sounds is finished, we receive the meaning aided by the memory impressions left in out minds by the preceding sounds. They rejected the idea that the meaning of words was to be found outside of conversation.
Sphoṭa grammarians see a number of problems with this system. Primarily, sounds and words can be used to contribute to many meanings. Furthermore, in the use of Sanskrit a theory of Sphoṭa is inherit in the designation between meaningful sound (spoken word) and mere sound (meaningless). The earliest form of Sphoṭa claimed that meaning was carried by totality. Later on, Pāṇini claimed that Sphoṭa is the smallest particle of language that can carry meaning. Underneath phonetic variation, there would be a meaning bearing particle attached to a perfect pronunciation. In Sanskrit, this smallest meaning bearing unity of language is the verbal root.
Bhartṛhari claims later that in language, we attempt to express a unified thought. The Sphoṭa can be many things as long as it conveys this unified thought from the mind of the speaker to that of the recipient. The whole sentence is the most complete form of Sphoṭa for it contains the entire unified thought. In communication, we do concatenate sounds and unify them into words and sentences. The unity of meaning however starts in the mind of the speaker, it is then fragmented into sounds and unified once again in the mind of the recipient.