This refers to the direction in which the router is guided along the workpiece.
In co-rotation, routing is done by moving the router in the direction in which the cutter rotates.
In counter-rotation, the router is guided against the direction in which the cutter is running.
In counter-rotation, the cutter pulls the router towards the workpiece; in co-rotation, the cutter is pushed away from the workpiece. With the exception of a very, very few cases, you always have to cut in counter-rotation direction!