This is a figurine industry term originally termed during the first production of G.I. Joe figures. Basically it means a generic character that is purchased en masse to build an army.
Examples of this are the Cobra Crimson Guard, Star Wars Stormtrooper, Imperial Guard, the TMNT Foot Clan Foot Soldier, or Mouser figures.
Source: Palisades Toys http://www.palisadestoys.com