Sprite sheets already exist since the first days of computer games.
The idea is to create one big image that contains all animations of a character instead of dealing with many single files. They got less important for some time after more and more 3d games showed up - but got their big comeback with mobile devices and 2d games.
Originally sprites referred to independent objects that are composited together, by hardware, with other elements such as a background. This occurs as each scan line is prepared for the video output device, such as a CRT, without involvement of the main CPU and without the need for a full-screen frame buffer.
Use of the term sprite has expanded to refer to any two-dimensional bitmap used as part of a graphics display, even if drawn into a frame buffer (by either software or a GPU) instead of being composited on-the-fly at display time.
Make an animation strip. Place each animation frame next to each other. All frames have the same size, and the animation is aligned in each frame.
You can also create a tileset from a sprite sheet. A tileset usually contains roads or building blocks for game levels.
But in this format, the sprites waste a lot of memory, because of all the additional transparency.
To optimize the unnecessary space, remove the transparency surrounding the sprite and shrink it to the bounding box.
The game engine now needs additional information to draw the sprite: It needs to know where the sprite is located and how much transparency was removed.
Uncanny Valley
In aesthetics, the uncanny valley is the hypothesis that human replicas which appear almost, but not exactly, like real human beings elicit feelings of eeriness and revulsion among some observers.