"Granuloma" means a small mass of tissue that forms because of inflammation (swelling). "Annulare" means shaped like a ring.
Granuloma annulare is a harmless skin reaction that causes small, firm, raised bumps on the skin. The bumps form a ring with normal or slightly sunken skin at the center of the ring.
Doctors don't know what causes granuloma annulare. It may be a reaction from your immune system.