Cloaking is a technique where the site shows different content for users and for search engines. For example, a user searches for vacation in Spain. A page on the website shows search engines that it is about a vacation in Spain (usually, the version for search engines is very well optimized) but in fact, it is about oil olive.
This type of activity is prohibited by Google: it will remove the website from search engines if they notice. It is partly because the website tries to hide malicious content under search-friendly cover and partly because it lowers the quality of search results.
Cloaking comes in different forms, for example:
Image Galleries
Search spiders can not scan images, they are aiming for text. So some websites create keyword-stuffed pages that are more friendly to search engines than a gallery of images.
Hidden Keywords
Keyword spamming is not pleasant to read. Therefore, in order to both provide high-quality content to users and get noticed by search engines, websites present two different versions of the text.
However, it is still too risky to use this SEO technique and is heavily advised against by all professionals.