Scruffing a cat means holding it by the back of the neck and restraining its movement. Kittens have an instinct to go limp when they are scruffed, since mother cats often carry their kittens around this way. The instinct of kittens to go limp persists to some degree in adulthood, too, so scruffing can be an effective way to keep a cat docile as a last resort. Adult cats only really get scruffed during mating or in fights, though, leading some veterinary behaviorists to argue that the docile behavior you see when a cat is scruffed is actually a response to high levels of fear and stress. This isn't a settled issue - there is a vigorous debate within the veterinary community about scruffing and whether or not it is good practice. Though it is probably OK to scruff your cats from time to time if other restraint methods aren't safe or effective.

HOWEVER,

Never carry your adult cats this way! You can cause serious injury to your cat and it is quite likely to be painful. This is especially true for heavier cats, but adult cats of any size really shouldn't be carried this way. A friend of mine picked up my cat like this and I just about threw him out of the house. Never do this!

tl;dr: If you have to scruff a cat, make sure its hind legs never leave the ground. But try other methods of restraint first, if at all possible. Carrying a cat by its scruff is dangerous and painful to your cat, especially if it's a chonky boi.