It is not clearly defined but left a bit to the interpretation of the officers, but usually it is understood as meaning that you have no criminal record or other violations of laws and rules. However, not all convictions mean you don't have good moral character.
If in doubt, consult an attorney with your specific details.
Wolf W. Kaufmann
Southern California Immigration Attorney
No client-attorney relationship is being created by this posting. Please contact an attorney with questions about your case.