Quite simply, it is publishing more than one way.
You hear the term a lot in relation to traditionally published authors putting some other work out independently. Some authors can write faster than a traditional house can publish. Or, sometimes, a work an author has created doesn't fit into what their traditional house publishes, so they have to find a new way to release the book. There are a LOT of hybrid authors now.
In general, there are 5 ways to publish.
2-Small Press Publishing
4- Vanity Press publishing
5- Hybrid Publishing
Hybrid Publishing is doing any of the top three in any combination, with the money flowing toward the author. If you have a multi-book contract with a small press but have a backlist, you can Indie pub them and be a hybrid author. Your reader reach will be expanded and hopefully your income as well.
It is a very smart business practice to be a hybrid author.