It's a newish term that I have understood to mean coding by letting the AI do nearly all the work, just telling it what you want done in broad strokes. If the code returned seems to "vibe" with what you're trying to do, then accept it.

Contrasted to AI assisted coding, where you would give much more detailed prompts with technical specifications, and read over every line to make sure you understand it before accepting a response.

In theory, vibe coding can let someone with very limited technical expertise build complete apps, so understandably a lot of people are excited by it.

In practice, it doesn't seem like we're there yet. But each new step in AI development leads to people trying again, and it's hard to deny that the results are getting better. I think we're at the stage of where AI image generators were a few years ago. Very much in the uncanny valley.