I've always interpreted it as ready an attack, if they charge, poo poo for them.
Readying an action involves YOUR TURN coming up and you not doing "enough" during tha turn and saving the standard action part for a specific occurance.
If for no other reason than how the table has to run, everybody at the table has a pretty good idea what's going on, even if you never say the word "ready". "Orc 3 moves to the side ... Orc 4 ..." Orc 3 didn't do anything meaningful. If he has a long pointy stick, chances are, he's readied an attack.
Now, say the barbarian comes up next. The ONLY way the orc can ready an action is if he goes before the barbarian. So, table-wise, if Orc 3 has just acted, and taken no functional action, even if the Barbarian has to charge to get into melee range and attack, he KNOWS it would be an idiot maneuver to do so.
So, really, the only possible utility is if you're a heavily armored guy with a longspear facing a barbarian, and you get to act first. You won't be able to get to HIM and attack, while he can get to you, so you wait for him to come to you.
Which I've had GMs do to me and which I've done as well. Generally, it's a poor tactic. If you're in such a poor position, it's better to retreat as rapidly as possible. If you're going to waste a round to, basically, discourage somebody from moving and attacking, it's usually a safe bet that the other side has something else they can do that round. Like obliterate you with spells.
Even WITH an open interpretation, I've never seen anybody successfully set vs. a charge. D&D combats are usually such that a charge isn't necessary past the partial-action surprise round (in which case you didn't get to set anyway). Either you're within general maneuver distance, or you're far enough away that SOMETHING is in the way of your charge. Party members, corpses, rough terrain, tables, WHATEVER. Charge is such a finicky maneuver, creating a "tactic" to discourage it that involves wasting an entire round with your kilt hiked up is, essentially, useless.
I liken it to America creating a Dedicated Mongoose Defense Corpse to defend against the possiblity of the Ruskies launching a Cobra Paratrooper Surprise Offensive ...
--fje