Researcher Edward Thorndike is generally credited with coining the term back in the 1920’s. He observed that:
In a study made in 1915 of employees of two large industrial corporations, it appeared that the estimates of the same man in a number of different traits such as intelligence, industry, technical skill, reliability, etc., were very highly correlated and very evenly correlated.
It seemed that if an employee were judged highly on one good trait, then they’d be more likely to be judged highly on another good trait! His finding led to this definition:
The halo effect refers to an error in reasoning where an impression formed due to a single trait is allowed to influence ratings of unrelated factors.
In other words, we have a tendency to view others holistically - that is, as all good, or all bad. If someone does well in a certain area, we have a tendency to think they will automatically do well in another area, regardless of whether the areas are related! The opposite also holds true, one bad trait can influence our judgement of other traits - this is often referred to as the reverse halo effect.
Politics is a good place to look for examples. I can recall seeing some pretty extreme halo (and reverse halo) effects around Obama in his early years, and more recently around Trump. In reality - it’s highly unlikely that everything about Trump is “good” (halo effect) or everything about Trump is “bad” (reverse halo effect).