Term used by local assholes, especially at beaches, who show hostility towards anyone who is not from the specific area. Also common in coffee shops. Be prepared to receive nasty glares from the locals. You don't have to be a tourist or from out of state to experience this, you could live in the next town over. Local elitists love to ruin your fun.
"Look at that dick dropping in on that wave, I've never seen him before."
"He's a non-local."
"Locals only, asshole!"