Plain English Meaning
The pilot can no longer tell which way is up, how the aircraft is tilted, or which direction it is moving, because the body's senses are giving false signals when outside visual references are missing.
Full Definition
A condition in which a pilot loses an accurate sense of the aircraft's position, attitude, or motion relative to the earth, typically because visual cues are reduced or absent and the inner-ear and body senses provide misleading information.
Context Anchor
Seen in accident reports, night flying, cloud flying, and discussions of relying on flight instruments when outside references are poor.