Such meaning is mentioned in the hadith of the Messenger of Allah (peace and blessings be upon him) in which he said, “Whosoever does a good Sunnah will get the reward for it and the reward of others who followed him in doing the same thing until the day of judgment. And whosoever does a bad Sunnah will have the punishment of doing it and the punishment of others who followed him in practicing it” (Muslim).
However, the definition of Sunnah differs depending on the area of Shari`ah. For example, a scholar in the area of Usool Al-Fiqh (Arabic for: fundamental principles of Islamic jurisprudence) will define Sunnah as “whatever was reported that the Prophet (peace and blessings be upon him) said, did, or permitted to do.”
As an example of what he said are the hadiths that deal with the different Ahkam (rulings) in different contexts, such as his (peace and blessings be upon him) saying, “The reward of deeds depends on intentions” (Al-Bukhari and Muslim).
An example of what he did, is that which his Companions have reported of him (peace and blessings be upon him) doing in the matters of `Ibadaat (Arabic for: acts of worship), such as the way to perform salah (Arabic for: prayer), Hajj (Arabic for: pilgrimage), Adab As-Siyam (Arabic for: etiquette of fasting).
An example of what he (peace and blessings be upon him) permitted is whenever he kept silent upon seeing the Companions doing; his silence in such case served as an approval. Also, when he verbally acknowledges the Companions on what they did.
An example of his permission is when the Companions made Ijtihad (Arabic for: personal reasoning) during the battle of Bani Quraythah. He (peace and blessings be upon him) said, “Do not pray `Asr till you are at Bani Quraythah” (Al-Bukhari and Muslim).
Some of the Companions understood that the Prophet (peace and blessings be upon him) meant that they should delay prayer till they reach the place. However, some Companions understood that they have to hurry, and so they did pray `Asr on time. In neither case did the Prophet (peace and blessings be upon him) say anyone of them was wrong and he did not reject what they did.
Another example of the Prophet’s permission of an action is when Khaled ibn Al-Walid ate a lizard that he (peace and blessings be upon him) refused to eat. Some of the Companions wondered and asked him, “Is it haram (Arabic for: prohibited by Allah) to eat it, O Messenger of Allah?” The Prophet replied, “No, but it is not common where I live, and I don’t feel like eating it.” (Al-Bukhari and Muslim)
The term Sunnah is also called to “name a religious ruling that is based on a legal evidence whether from the Qur’an, the Prophet’s sayings, or Ijtihad by the Companions, such as the collection of Qur’an in one book and unifying the reading of the Qur’an on one Harf (Arabic for: reading narration).
Opposite to this is bid`ah (Arabic for: innovation) in religion [about] which the Prophet (peace and blessings be upon him) said clearly, “Follow my Sunnah and the Sunnah of the righteous Caliphs after me” and did not say follow my bid`ah, which should not be taken as the same as Sunnah. This can be shown by the definition used in fiqh were we say this is the sunni divorce (meaning a divorce done in accordance to Sunnah) and that is the bid`i divorce (a divorce done without accordance to Sunnah).
These differences in looking at Sunnah are dependent on the faculty of scholars, just like any area of science where definitions vary.
In general, we can define the Sunnah as whatever the Messenger of Allah (peace and blessings be upon him) said or did to be way of life for us.