``Sandbox'' is a security term. It can mean two things:
A process which is placed inside a set of virtual walls that are designed to prevent someone who breaks into the process from being able to break into the wider system.
The process is said to be able to ``play'' inside the walls. That is, nothing the process does in regards to executing code is supposed to be able to breech the walls so you do not have to do a detailed audit of its code to be able to say certain things about its security.
The walls might be a userid, for example. This is the definition used in the security and named man pages.
Take the ntalk service, for example (see /etc/inetd.conf). This service used to run as userid root. Now it runs as userid tty. The tty user is a sandbox designed to make it more difficult for someone who has successfully hacked into the system via ntalk from being able to hack beyond that user id.
A process which is placed inside a simulation of the machine. This is more hard-core. Basically it means that someone who is able to break into the process may believe that he can break into the wider machine but is, in fact, only breaking into a simulation of that machine and not modifying any real data.
The most common way to accomplish this is to build a simulated environment in a subdirectory and then run the processes in that directory chroot'd (i.e. / for that process is this directory, not the real / of the system).
Another common use is to mount an underlying filesystem read-only and then create a filesystem layer on top of it that gives a process a seemingly writeable view into that filesystem. The process may believe it is able to write to those files, but only the process sees the effects - other processes in the system do not, necessarily.
An attempt is made to make this sort of sandbox so transparent that the user (or hacker) does not realize that he is sitting in it.
Unix implements two core sandboxes. One is at the process level, and one is at the userid level.
Every Unix process is completely firewalled off from every other Unix process. One process cannot modify the address space of another. This is unlike Windows where a process can easily overwrite the address space of any other, leading to a crash.
A Unix process is owned by a particular userid. If the userid is not the root user, it serves to firewall the process off from processes owned by other users. The userid is also used to firewall off on-disk data.