A situation where a person decides to look on the bright side of an event/happening. The words are used in a sarcastic manner, but can sometimes be used for a situation which is a total failure. In effect the definition is the total opposite of what you would expect it to be.
Person 1: Hey man, how did you manage to pay for this euro-trip!?
Person 2: Ah mate, my Gran died a few months ago, left me this inheritance ...
Person 1: TOTAL WIN!
Person 2: Whaaaa!?