Teabag (your spelling may vary) refers to sitting on a defeated player's face or body and standing up right after, multiple times in a row.
The specifics depend on the game. For instance, in some games you'd crouch, in others you'd lie down. You still have to stand back up soon after, and repeat the process multiple times for the same person.
The victim doesn't have to be an opponent (though, usually they are), and they don't have to have been defeated by you.
Regardless, it is a fairly vulgar and disrespectful way of treating the defeated and is widely considered to be an insult.