Verb - to hide booze/drugs in the vicinity of a party to consume later. If you can remember where you left it then you're in a fit state to drink/take it. If not then it lies there to be discovered by some lucky partygoer/bastard at a later date. Though it sounds easy there is much more skill involved in a good squirrel than you think.
'Dude, we've run out of booze/drugs/wotsits'
'don't worry man, I squirrelled some in that old fridge in the park'
'there is no fridge in the park'
*the months pass*
'check out this shit, someone must have squirrelled it'
'nice, well it's ours now'