Collocated collaborative work is where several people are working together in the same place. This may be synchronous (e.g. side by side at a desk) or asynchronous (in a hospital ward, but on different nursing shifts). It is in contrast to remote collaboration. Co-located vs remote is the 'time' axis of the groupware time-space matrix.
Time/space matrix, with examples. Source Chapter 19 Groupware Human–Computer Interaction, Dix, Finlay, Abowd, Beale (2004).