In software world, this term refers to 'just in time compilation'.
It's the translation of computer program into machine language during execution time.
This translation is usually done by a virtual machine (VM).
As the term implies, this translation is only done to a certain part of the program which is needed for execution at a given time.
Some languages support compiling of the human readable syntax to an intermediate form. For example, a Java compiler compiles java code to bytecode. HotSpot JVM converts the bytecode into machine language which a computer can understand.