This is a penalty on the defense which is called when the defender improperly enters the neutral zone prior to the snap, causing the offensive player to false start. Since the defensive player caused the false start, the defense is hit with a 5-yard penalty. The neutral zone is defined as the length of the football, from end to end. The only player allowed in the neutral zone is the offensive player snapping the ball.
A neutral zone infraction should not be confused with a false start or encroachment, both of which occur as a result of crossing into the neutral zone. A false start is committed by an offensive player moving prior to the ball being snapped. Encroachment is when a defensive player makes contact with an offensive player prior to the ball being snapped. During games, you will often see offensive players purposely cross the neutral zone if they believe the defender is improperly positioned, or getting a jump on the snap count. This is because the neutral zone infraction is only called if the offensive player false starts as a result of the defender. This gamble can backfire if the defender is properly positioned.