It's when you adjust all the spokes on the tire until it is perfectly round and straight. This prevents wobbling and unwanted up and down movement when riding.
Truing is the process of tightening and loosening the correct spokes on a tire to even out the pressure on the rim. By evening out the pressure on the rim you straighten it out, and increase the strength.
Truing bicycle tires is getting them perfectly straight so that there is no wobble when the wheel spins. It is sort of like balancing tires on a car. It is especially helpful on racing or road bikes.
