Quantization, in musical terms, is the process of adjusting the timing of played notes so that they fall precisely on a grid or bars and beats. This technique can be used to take a performance that may have been a little sloppy, or rushed, and adjust each note so it is played where it should be, instead of ahead or behind of the beat.
Quantization is a very common process in MIDI programming, since it easily allows the user to create spot-on performances with as few takes as is necessary. Quantization can be used to alter a previously recorded MIDI performance, and it can also be used in real time when using devices like Maschine and Ableton Live.
Here is a great quick tip on how to quantize a MIDI performance in Pro Tools. This technique is very similar in most DAWs.