In phones, time-of-flight refers to a category of sensors that measure the precise distance between the sensor (in the phone) and external objects in front of the sensor. The measurement is made by emitting a special invisible beam (usually light, but can also be sound) and measuring the time it takes for that signal to make the round-trip from the sensor to the object and back, reflecting off the object.
The most advanced ToF sensors employ special cameras to make thousands of ToF measurements at once, generating a relatively accurate 3D map of objects in front of the sensor. This can be used for facial recognition as well as AR (augmented reality) applications.
Simpler ToF sensors only make a single distance measurement, directly in front of the sensor. These also have applications in phones as proximity sensors, or camera focus sensors.