In the context of NLP, it refers to the ability to use our senses to make accurate observations about ourselves or other people.
Example
NLP recommends looking at eye movements, changes in skin colour and breathing, and postures in order to get information about what is happening to other people.
In the classroom
Being able to make accurate observations about what learners are feeling is important. Teachers can optimise this by thinking about classroom layout, their own position and view of learners, what they are doing when learners are working, and how much time they spend talking and listening. Useful data on these things can be gathered by a peer observation, or by videoing a class.
Further links:
https://www.teachingenglish.org.uk/article/classroom-layout
https://www.teachingenglish.org.uk/article/monitoring-0
https://www.teachingenglish.org.uk/article/reflective-teaching-exploring-our-own-classroom-practice