CATO is a failure of a rocket, generally explosive, where all the propellant is burned in a much shorter time than planned. This can be a nozzle blow-out (loud, but basically harmless), an end-cap blow-out (where all of the pyrotechnic force blows forward, expelling and igniting the payload, if any) or a casing rupture (which has unpredictable, but usually devastating, effects).
Opinions on the meaning of the acronym range widely. Some say it's not an acronym at all, but simply a contraction of 'catastrophic' and should be pronounced 'Cat-o'. Others maintain that it is an acronym but disagree on the meaning, offering a broad spectrum of CAtastrophic Take Off,' 'Catastrophically Aborted Take Off,' 'Catastrophe At Take Off' and the self referential 'CATO At Take Off.'