Rancio is a term used to describe certain wines that have been oxidised or have been exposed to heat. The term is synonymous with a pungent, off-odour but despite this sounding unpleasant - it is not considered a negative trait. It is merely something that’s characteristic of these wine styles.
From a Spirit’s perspective, rancio is something you can pick up in aged Cognac and Whiskies (Rancio Charantais is considered specific to Cognac, which is why it is sometimes referred to as Charente Rancio).
In spirits, just as it is with wine, Rancio is derived through the oxidation of fatty acids within the spirit, which evolving into ketones. This creates mercurial flavour notes that many describe as earthy, buttery or nutty depending on the stage it is at. The phenomenon intensifies over the years, but it would be unusual to experience it in spirits (in particular Cognac) that are less than eight to ten years old.