The term silo is not really a project management term, but it is often used in a project management context. For example, when you say that the teams on a project work in silos, it means that each and every individual team works independently of the other team, and the teams don't know anything about each other's work.
For example, let's say that you are creating a software project, and this project has the following teams working on it:
- The CRM team: The team developing the CRM part of the software
- The design team: The team developing the interface for the software
- The testing team: The team testing the software
If these team work in silos, this means that they know nothing about the progress of each other unless, of course, the project manager passes the information from one team to the other.
Clearly, this method has a lot of disadvantages (mainly the transfer of knowledge) but may be useful in projects where each feature is completely independent of each other (less communication overhead between teams).