1. Navigation or trade along the coast.
2. The transport of goods or passengers between two places in the same country by a transport operator from another country.
The first definition is the original, referring only to shipping; in the modern world it also refers to other forms of transport, including aviation.
Wikipedia has examples.
Cabotage rules are rules related to one country trading in another - such rules are a topic of Brexit discussions.
Etymology: French caboter, to sail coastwise