I think this is most likely refering to your keyboard letter setting. If someone asks you to turn your caps off, then they are asking you to type in standard lowercase letters (except for when upper case is called for gramatically).
THIS IS UPPER CASE
this is lower case

"caps off" refers specifically to the caps lock button, which can be turned on or off to lock in the capital letters. However, most native speakers read mostly lower case letters through life, so when someone types in upper case it is more difficult to read and because of they way we naturally emphasis words, it can also seem very demanding or like you're yelling. Typing in all caps is considered somewhat of an annoyance.