According to Atiyah, a TQFT is a functor from the category of cobordisms to the category of vector spaces.
How does this definition relate with the physics of quantum mechanics?
What does the category of cobordism in the above definition represent physically?
John Baez has written various things about this. Briefly, cobordisms should be thought of in terms of time evolution: you have two manifolds which represent space, and a cobordism between them represents time evolution. Of course to be more physically realistic one should put a Lorentzian structure on the cobordism and make the two manifolds spacelike slices, but I guess the point of the adjective "topological" is to ignore these extra details for the sake of mathematical simplicity.
Then the functor to $\text{Vect}$ is supposed to be a simple version of a functor to $\text{Hilb}$ (the category of Hilbert spaces) assigning to a manifold the Hilbert space of states on it, and assigning to a cobordism a linear operator representing time evolution. Again, to be more physically realistic one should demand that the operator be unitary and indeed there is a notion of unitary TQFT (but many TQFTs of interest to mathematicians are not unitary).