In regular society, it refers to any system whereby new members are chosen; they cannot simply apply. In relation to websites and other technology-related organisations, the term refers to a more specific situation whereby invitations are sent, but there is never any approval needed from other members.
In general society, this refers to systems in which new members are chosen rather than applying themselves. For websites and tech-oriented groups, it means that invitations are sent out without requiring any consent from existing members.