AutoIndent is an option for Cell which specifies what automatic indentation should be done at the beginning of a new line after an explicit return character has been entered.
Possible settings for AutoIndent are:
With AutoIndent->True, tabs or spaces used for indentation on the previous line are explicitly inserted at the beginning of the new line.
With AutoIndent->Automatic, line breaks are always indicated by an IndentingNewLine character even if they were originally entered using or \[NewLine].
Indentation after an \[IndentingNewLine] is automatically redone every time an expression is displayed.
The amount of indentation after an IndentingNewLine is determined by the settings for the LineIndent and LineIndentMaxFraction options.
See The Mathematica Book: Section 2.10.11.
See also: LineIndent, ParagraphIndent, ShowAutoStyles.