A cow hocked horse is one which has hocks that turn inwards slightly - like a cow's do, hence the term.
Cow hocks are considered a fault in light horses, but not in draft horses. It is a mild deformity, however, and can cause stifle issues and make the horse more prone to arthritis in the hocks later in life. It's considered a particular fault in stock horses, which need to make sudden stops and turns.
In draft horses, cow hocks are acceptable - even desirable in some breeds. (Clydesdales are almost always cow hocked). The reason its desirable is because it allows the horse to walk within a plough furrow. As draft horses don't make tight turns or sudden stops and aren't often asked to carry a lot of weight (People do ride drafts, but their greater size makes the rider a lighter relative weight), they don't have the same problems with this conformation as riding horses. It's something to watch for in draft crosses, though, including draft mules.