What is a demonstrated crosswind component?
A demonstrated crosswind component is highest crosswind (corrected to make it 90°) which has been shown to be possible to safely land by a test pilot. It shall not require exceptional skill by an ordinary pilot, however it does not mean every pilot will be able to do so. It is also NOT a limit (contrary to what some say) - if the pilot does decide to land higher crosswinds, they can do so (but please take caution).

This number may not necessarily be the highest crosswind component that it's possible to land in -- it just has to be above the minimum capabilities required in the regulations. For example, say an aircraft, flown perfectly (yes, we're dreaming), was capable of handling a 30 knot crosswind component (no gust, ISA conditions), the manufacturer only needs to demonstrate safe landing with a crosswind component of one-fifth of the reference stall speed in the landing configuration. This would be:


10 knots @ 50KIAS VS0
12 knots @ 60KIAS VS0
14 knots @ 70KIAS VS0
15 knots @ 75KIAS VS0


Reference:


  (a) A 90 degree cross-component of wind velocity, demonstrated to be safe for taxiing, takeoff, and landing must be established and must be not less than 0.2 VS0.