What is consciousness?

TL;DR:   Nobody really knows.

For a little more detail, there is an interesting article on research done at San Francisco State University.   Here is a big excerpt:

Consciousness, per Morsella's theory, is more reflexive and less purposeful than conventional wisdom would dictate. Because the human mind experiences its own consciousness as sifting through urges, thoughts, feelings and physical actions, people understand their consciousness to be in control of these myriad impulses. But in reality, Morsella argues, consciousness does the same simple task over and over, giving the impression that it is doing more than it actually is.
"We have long thought consciousness solved problems and had many moving parts, but it's much more basic and static," Morsella said. "This theory is very counterintuitive. It goes against our everyday way of thinking."
According to Morsella's framework, the "free will" that people typically attribute to their conscious mind -- the idea that our consciousness, as a “decider,” guides us to a course of action -- does not exist. Instead, consciousness only relays information to control "voluntary" action, or goal-oriented movement involving the skeletal muscle system.

I enjoyed Sleights of Mind, a book on how magicians perform illusions and how we trick ourselves.  It touches on similar subject matter.

The study of consciousness relates to evolution and religion in what our minds actually are. Is the mind part of an incorporeal spirit or entirely a product of the brain.  I think Morsella's research supports the latter concept.  Some background at Wikipedia.
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Added Sept 29, 2015:
BBC on Blindsight and consciousness.

Picking apart the experience may also reveal further clues about the power of unconscious mind. To understand how, imagine that you are part of a strange puppet show. You have been blindfolded, and your limbs are tied to invisible strings. Every so often, they are tugged here or there by a hidden puppet master, leading you through a complicated dance. To the audience, it looks like you are in full control of your actions, but you don’t have the foggiest idea of what you’ve just done.

The non-conscious mind acts as the puppet master, pulling the strings without their knowledge

That puppet show is essentially what happens when someone with blindsight navigates their way past obstacles – with the non-conscious mind acting as the puppet master. “It shows that awareness isn’t the whole story,” says Tamietto. “Very often we believe we have decided something, but our brain has made the decision for us before that – in many ways, and in many contexts.”