I went through this recently with a used Xbox One bought off eBay.
To initialize the Xbox, it must connect to Microsoft Live, where you enter (or create) a Microsoft email and password (Xbox Live account). You then are assigned a player name and symbol for Xbox Live/your Xbox, and must choose a 6-digit security code. You then go offline, turn off your network in Xbox settings, shut down and restart.
Now, take a game disc which has not been installed yet, and insert it in the drive. The game will install, but because you are not connected to Xbox live, it won't ask to download an update. It may ask you to sign in as your player and enter your 6-digit passcode. You can then play the game, shut down, restart and play again without connecting to the internet.
Unless you know this, you might install the game while connected to Xbox Live, decline the update, play, then get an error saying to reinsert the disc the next time you try to play. The error code means "not connected to Xbox Live". You must then uninstall the game and follow the above instructions.