It stands for Search Engine Optimization. It helps to improve your site or page's ranking in search engines when people search using various keywords.
To SEO your site you need to make certain steps such as generating a metatag, making proper use of your keywords throughout your site or page, using proper keywords in your headers and titles, creating links to other useful sites, and having incoming inks to your site. In general, the more sites you have linking to your site or page, the better your site will do in searches. It is best, however, to have incoming links from relevant sites that are similar to yours.
This site offers a breakdown of important features and techniques used in SEO: