Karma (Sans.) Physically, action; Metaphysically, the LAW of RETRIBUTION; the Law of Cause and Effect or Ethical Causation. It is Nemesis only in the sense of bad Karma. It is the eleventh Nidana in the concatenation of causes and effects in orthodox Buddhism; yet it is the power that controls all things, the resultant of moral action, the metaphysical Samskara, or the moral effect of an act committed for the attainment of something which gratifies a personal desire. There is the Karma of merit and the Karma of demerit. Karma neither punishes nor rewards; it is simply the one Universal LAW which guides unerringly and, so to say, blindly, all other laws productive of certain effects along the grooves of their respective causations. When Buddhism teaches that "Karma is that moral Kernel (of any being) which alone survives death and continues in transmigration" or reincarnation, it simply means that there remains nought after each personality, but the causes produced by it, causes which are undying, i. e., which cannot be eliminated from the Universe until replaced by their legitimate effects, and so to speak, wiped out by them. And such causes, unless compensated during the life of the person who produced them with adequate effects, will follow the reincarnated Ego and reach it in its subsequent incarnations until a full harmony between effects and causes is fully re-established. No "personality" — a mere bundle of material atoms and instinctual and mental characteristics — can, of course, continue as such in the world of pure spirit. Only that which is immortal in its very nature and divine in its essence, namely, the Ego, can exist for ever. And as it is that Ego which chooses the personality it will inform after each Devachan, and which receives through these personalities the effects of the Karmic causes produced, it is, therefore, the Ego, that Self, which is the "moral Kernel" referred to, and embodied Karma itself, that "which alone survives death."
Source: H.P.Blavatsky - The Key to Theosophy, The theosophical glossary