Off-world is when an object or avatar is sent out of the bounds of the grid. When this happens to an avatar, it will be trapped in the "endless ocean" (which can be seen from any sim that is at a grid's "edge" and is the invisible wall that can not be crossed and has endless ocean on the other side). Generally, the avatar will be unable to move but possibly still able to chat with others through IMs. A resident will no longer be off-world when they relog, but when an object goes off-world it will either be returned to the owner's inventory or deleted.