This is the principle that says you'll get as much done today as you got done yesterday. In iterative projects it says that you should plan to do as much this iteration as you did last iteration. The term comes from the Extreme Programming community.

It's full origin was when I was working on the tasteful green book with Kent. We had done this form of estimating available effort before but didn't have a good name. I remembered a story I think I might have read while at school.

Some country decides to build a sophisticated computer system to predict the weather. After spending more money than I can imagine, they come up with wonderful result - and proudly claim that the system is 70% accurate. Somebody then figures out that in this country if you predict today's weather will be the same as yesterday's weather you will be 69.5% accurate.

The point of course is that while Yesterdays Weather is a crude mechanism, it ends up being not significantly less accurate than more sophisticated (i.e. complicated) ways of doing it.