In video games it means two things.
For turned based strategy games, it means to keep your units together usually in or near their default positions on the map and use defensive tactics such as attacking only when the enemy is near you, using defend commands or other units to defend each other, etc.
In fighting games, it means to keep defending and block all of your enemies attacks untill there is an opportunity to strike.
Basically, in both cases it's using defense/blocking untill you have a good opportunity to make an action or attack your enemy.
"I just beat Nightmare Geese in Real Bout Fatal Fury! He was tough, but I blocked his attacks with my turtling skills and then attacked when I had the opportunity."
"In Front Mission in the 2nd or so battle against Driscoll's forces, I turtled and didn't move my units then attacked as soon as the enemy came near by"