Short-and-sweet name for a useful thing to do when figuring out what a group wants from a game (e.g., something to deploy during Session Zero).
"Lines" are things that, if crossed, would break the experience. "Veils" are things that are okay to occur, but not much "on camera", so to speak--hidden behind a veil of fade-to-black/nondescript summary. More or less, the antithesis of "must-have" and "big plus"--a "must-NOT-have" and "keep it soft touch".
Lines and veils can be anything, whether in-world or game-rules or whatever.
If a group has incompatible interests, e.g. one has a line against (say) killing innocents and another player (or the GM) is specifically there to play through seeing/doing genuine, unrepentant evil, spelling this out saves everyone time. It helps nip bad group comps in the bud. For groups that have compatible interests, it helps avoid unintentional harm; if you know that sex scenes or high-detail bartering are veils for player A and B respectively, then A knows not to get hyper-invested into detailed shopkeeper interactions and B knows that adult events are okay but nitty-gritty details are not.
The point is to promote communication and avoid causing unintentional harm.