Fecal coliforms (sometimes faecal coliforms) are facultatively-anaerobic, rod-shaped, gram-negative, non-sporulating bacteria. They are capable of growth in the presence of bile salts or similar surface agents, oxidase negative, and produce acid and gas from lactose within 48 hours at 44 ± 0.5șC.

Fecal coliforms include the genera that originate in feces; Escherichia as well as genera that are not of fecal origin; Enterobacter, Klebsiella, and Citrobacter. The assay is intended to be an indicator of fecal contamination, or more specifically E. coli which is an indicator microorganism for other pathogens that may be present in feces. As recently as April 2006, many official websites including that of the Environmental Protection Agency failed to address the fact that presence of fecal coliforms does not necessarily indicate the presence of feces, as well as not being directly harmful.

In general, increased levels of fecal coliforms(fecal bacteria) provide a warning of failure in water treatment, a break in the integrity of the distribution system, or possible contamination with pathogens. When levels are high there may be an elevated risk of waterborne gastroenteritis. Tests for the bacteria are cheap, reliable and rapid (2 -day incubation).

The presence of fecal coliform(fecal bacteria) in aquatic environments may indicate that the water has been contaminated with the fecal material of man or other animals. Fecal coliform bacteria can enter rivers through direct discharge of waste from mammals and birds, from agricultural and storm runoff, and from the main human sewage. However their presence may also be the result of plant material, and pulp or paper mill effluent.

Pets, especially dogs, can contribute to fecal contamination of surface waters. Runoff from roads, parking lots, and yards can carry animal wastes to streams through storm sewers. Birds can be a significant source of fecal coliform bacteria. Swans, geese, seagulls, and other waterfowl can all elevate bacterial counts, especially in wetlands, lakes, and ponds.

Agricultural practices such as allowing livestock to graze near water bodies, spreading manure as fertilizer on fields during dry periods, and allowing livestock watering in streams can all contribute to fecal coliform contamination.

Source: Wikipedia (All text is available under the terms of the GNU Free Documentation License)

For more information (background, pictures, experiments and references):
Water Quality K-12 Experiments & Background Information
Fecal Coliforms
The removal of E. coli K12 from water