Excalibur was the strongest sword in the game prior to PC v1.2, but it has now been superseded by the True Excalibur, True Night's Edge and their combined power, the Terra Blade, along with a few others. It is part of the Hallowed weaponry set. Excalibur can continuously attack, which can be useful for charging into a group of enemies. Like all Hallowed weapons, Excalibur emits a faint glow and sparkle effect when swung.
The sword's name comes from Arthurian legend, where Excalibur is the sword of King Arthur which is either pulled from an anvil on a stone or given to him by the Lady of the Lake. Depending on the telling of the legend, Excalibur is a magical weapon and/or a symbol of the rightful ruler of Britain.
Excalibur is said to be the holy sword of the gods. This is reinforced by the fact that the sword in-game a Hallowed weapon.