Floating (or “ragdoll”, etc.; the terminology is not universal, particularly across game fandoms) is a state where a character is left with a damage hitbox even though he or she has been blown away; in essence, they are like a volleyball waiting to be hit at just the right time (the act of taking advantage of this by batting the opponent up each time is known as juggling, which is the common combo method in 3D games like in the Tekken series; however, taking advantage of this like you would see in most combo games by performing multiple hits in succession is known as an air combo).
A launching move puts the opponent into the floating state when successful.