String string = "Hello World";
< 1 > < 2 > < 3 >
1 is a data type, 2 a variable name, 3 a (String) literal
From the JLS:
A literal is the source code representation of a value of a primitive type [like 1, true, 't'or 1.2f], the String type [like "" or Something], or the null type
[null]