Poly is short for Polygon. The models used in the game are made up of a bunch of polygons (usually triangles) that form the model. the more polys used in a model, the more computer power and space it takes up. Since AC is made to run on low end machines, most good modelers will keep things low poly so that they do not cause the user's computer to lag.
Explained in more detail: http://en.wikipedia.org/wiki/Polygonal_modeling
Explained in more detail: http://en.wikipedia.org/wiki/Polygonal_modeling