Plain English Meaning
When one engine quits on a twin, the airplane wants to swing and slip sideways through the air. Zero sideslip is the precise combination of rudder pressure and a slight bank toward the working engine that stops that sideways slipping, so the airplane is flying straight through the air with the least possible drag.
Full Definition
A flight condition in a multiengine airplane with one engine inoperative in which the airplane is flown with a small bank toward the operating engine and a small amount of rudder, such that the relative wind strikes the fuselage straight on with no lateral airflow across it. This configuration produces the lowest total drag and the best single-engine , and is achieved by combining rudder input to with approximately 2 toward the live engine.