A sandbox is usually an open development term when a software or a game is under development and opened for public so that people can go in there, build stuff, delete stuff or just plain play with the features and send feedback for bugs.
Google has recently opened a public sandbox for their new Search Engine Algorithm called Caffine. It can be reached at:
http://www2.sandbox.google.com/ and it's basically a sandbox version of a search engine where people can see how their sites rank with the new Algorithm.