W-sitting is when your child sits on the floor with knees together and feet on either side of their hips. It is called that because if you look at them from above, it looks like they are making a W with their body.
If you see your child temporarily sitting in this position, or use they it as a transition stage to move in and out of other sitting positions or movements, it is fine.
What is not fine is if your child sits in this position for extended periods of time while playing on the floor.
I first learned about W-sitting when I took my first Itsy Bitsy Yoga teacher training back in 2005. In that training, we learned how if we see a kid sitting like this in yoga class to gently remind parents to have their child sit another way, because W-sitting is hard on the knees and hips and can cause damage.
W-sitting requires the hips to be positioned in extreme internal rotation – way past what is functional – which causes problems with the hips and knees down the road. Major muscle groups become very tight, causing in-toeing during walking (aka pigeon-toed walking). Kids who chronically W-sit have more shallow hip sockets, which can cause severe problems later in life. W-sitting is also hard on the knee joints due to excessive forces on the joint, making your child more prone to ligaments damage during play than non-W-sitting kids.