The act of cutting off someone's balls with broken glass.
It is a reference to the gruesome murder of Carlos Castro by Renato Seabra in New York City, in which his testicles were cut off with broken wine glass. Therefore, Carlos Castro was castroted.
Guy #1: Did you hear about Tim?! Someone cut off his balls!
Guy #2: I heard, they didn't just cut off his balls though... they castroted him.
Guy #1: Broken glass?!
Guy #2: Yes, sir.