It is a common Colombian slang term for "a woody" or "an erection". The -ito is added after dropping the -o to make it less offensive or more formal if you will, however there is nothing formal about the term at all!
It is also used as a verb and not a noun as commonly referred to in English, I have a woody or I have an erection. In Colombian Spanish we would say I am wooded (if you make the literal translation from English to Spanish using the correct verb tense)
Ese man esta todo parolo.