This is a baseball phrase defined as the area on the field in foul territory, usually not far from the team's dugout, where the next player up to bat prepares for their at-bat. It is typically composed of dirt lined with a white circle, though it varies from field to field. A batter in the on-deck circle is considered "on deck," because they are next up to bat. The on-deck circle is the only legal place on the field a player on the field may stand if they are not batting or on base. While in the on-deck circle, a batter will typically practice their swings timed to the pitching motion of the current pitcher.
In Major League Baseball, many teams have their logo painted within the on-deck circle instead of dirt. Since the on-deck circle is on the field of play, it can be a dangerous place to be standing if the batter fouls the ball in that direction. A player is not strictly limited to staying within the boundaries, though they are not allowed completely out of the circle while on-deck. If a player were to take a step outside the circle and did not interfere with play on the field or the other team, they would not be called for a violation.