It basically means planning your workout rotations so that you have different phases with different focuses. It comes from athletic training, where athletes may train to build muscle at a certain point, then train more specifically for their sport to prepare for competition, then go through a recovery phase.
For the rest of us, it just means cycling through rotations in a way that provides for recovery periods as well as work periods. P90X is an example of a periodized program that has 3 more intense weeks of work followed by a lighter recovery week focusing on flexibility and core work.