A condition induced internally by a practitioner, not from external factors. Something which is created by ourselves, a contractor, or an internal service organization, making things worse instead of helping or making more efficient. Something that's done internally, supposedly within span of control and with a common mission, that works against a solution instead of towards it. The term is co-opted from medicine, where it means a condition induced by a physician.
The outage was iatrogenic in that it was nothing external to the company. The IT department itself caused it by not duplicating existing parameters when it replaced the firewall.