It is a way of calling the group of American countries with linguistic and cultural influence of Spain and Portugal (which are Iberian countries), mainly because they were their colonies. In many cases, both countries of the Iberian Peninsula are also included in the group. It is not an official name of a region, so it is unnecessary to write it with a capital letter, although it is not bad if you want to give it a continental entity within a sentence. See latin america, latin america, Iberia.
