The Collaborative International Dictionary of English v.0.48:

Episode \Ep"i*sode\, n. [Gr. ? a coming in besides, ? episode; ?
   into, besides + ? a coming in, ? into + ? way, cf. Skr. sad
   to go: cf. F. ['e]pisode.] (Rhet.)
   A separate incident, story, or action, introduced for the
   purpose of giving a greater variety to the events related; an
   incidental narrative, or digression, separable from the main
   subject, but naturally arising from it.
   [1913 Webster]

WordNet (r) 3.0 (2006):

episode
    n 1: a happening that is distinctive in a series of related
         events
    2: a brief section of a literary or dramatic work that forms
       part of a connected series
    3: a part of a broadcast serial [syn: episode, installment,
       instalment]
    4: film consisting of a succession of related shots that develop
       a given subject in a movie [syn: sequence, episode]