What does mock location refer to on an Android device?
Mock location is used to choose a custom location which is different from where you are currently.
read more in the below article -
Android GPS Forensics
mock location is something which is not real or not obtained from GPS
mock location is to specify a different location (using Fake Location, sends a fake location to GPS) from what you're actually at, it is GPS in android emulator and you do not have a hardware GPS, so that you can test your GPS applications, it should work also on phones?
If you want to accurately get a pinpoint of your location you want it off. for instance if you lose your phone and have a fake location you will not be able to locate your phone.
If you want it to tell you other locations then turn it on.
It could refer to default location.
Could you be more specific? Where did this term come up? What are you trying to do?
I think this option is found in the Developer Options section along with the USB Debugging Mode, and the option mentioned says Allow Mock Locations.