Exactly that - using an agreed code to say something so that an illicit listener does not understand the exact meaning.
For instance, it is agreed that the word "cocoa" means bomb, "mug" means the place where the bomb is to be put, "heat it" means set off the bomb:
A: How are you doing, Al?
B: I'm fine. I've put the cocoa into the mug, and will heat it at 7.00 o'clock tomorrow morning.