It could also refer to an object to venerate not for itself but for what it represents ie. analtar pieces, or a triptych). However venerated objects are more properly called sacramentals. Sacred art is NOT an idol which is worshiped in an of itself.
It got a major boost during the Renaissance through the endowment of the Catholic Church who commissioned artists such as Michelangelo Buonarroti who painted the Sistine Chapel) and Gianlorenzo Bernini who created the massive columns in the basilica of St. Peter, as well as other artists who created some of the greatest masterpieces of all time.
Most Christian sacred art is allusive, or built around themes presumed familiar to the intended observer. For example, a depiction of a woman holding a baby or young child is almost certainly a 'Madonna and child', representing the Virgin Mary and the infant Jesus. Matthew, Mark, Luke, and John, the four New Testament authors of the life of Jesus, are commonly represented by, respectively, an angel, a lion, a bull, and an eagle.
In the 20th century, some Western artists have created modern Sacred art. Salvador Dali's The Crucifixion is a clear example.