One of the dirtiest words in the weeaboo lexicon, although not specifically limited to such a community. Every time it shows up (or is believed to show up), expect a lot of bickering. Something that has gone hand-to-hand with
censorship as time goes on.
One of those things bound to turn self-proclaimed levelheads into leveled heads.
In all seriousness though, localization involves changing things for games, anime, or manga to make it more suitable for a target region, especially in regards to cultural norms. Things like idioms, wordplays, region-specific jokes, and other visual modifications are modified for the target audience. It's one of those things you gotta be real careful with.
The act of localization, especially amongst weebs, is heavily contested if not outright reviled, in comparison to a more literal
translation (expect arguments such as creator's intent and the like to show up
all the time). When it comes to translations or localizations, either by fans or an official team, anything goes.
Just because it's done by a fan or a group of fans doesn't mean it's better and just because it's done by a localization team doesn't make it inferior and vice-versa.