It means the data type is derived (implied) from the context.
From http://msdn.microsoft.com/en-us/library/bb383973.aspx
Beginning in Visual C# 3.0, variables that are declared at method scope can have an implicit type var. An implicitly typed local variable is strongly typed just as if you had declared the type yourself, but the compiler determines the type. The following two declarations of i are functionally equivalent:
var i = 10; // implicitly typed
int i = 10; //explicitly typed
var
is useful for eliminating keyboard typing and visual noise, e.g.,
MyReallyReallyLongClassName x = new MyReallyReallyLongClassName();
becomes
var x = new MyReallyReallyLongClassName();
but can be overused to the point where readability is sacrificed.