An older type of toy electric train, so named beccause it was meant to travers a 27 inch diameter curve. Usually sold as a cheaper version of O Gauge, a common train typified by makers such as Lionel. O27 was made by Ives, Lionel, Marx and K-Line. It is still made by Lionel.
O27 has the same gauge (distance bwteen outer rails) as regular O Gauge trains. This distance is 1 and 1/4 inches.
I have one of those Marx O27 sets.
The O27 is not as fancy as O Gauge, but it is a lot of fun!