A boundary is a rule which demarcates the game world tangibly, often as a subset of a larger world. In sports this means the lines that govern when the ball is considered in or out of play or the track around which athletes must run.
In videogamees boundaries often take the form of invisible walls. The player can see beyond the area in which he is permitted to play, but unable to actually get there. Videogame designers (and players) usually prefer to enclose the game world more naturally than that because invisible walls break a sense of immersion.