The meaning is pretty plain. Virtue signaling (the hyphen seems to be optional) is communication of the fact that you are a Good Person, not a Bad Person.
The force of the expression is in the second part. You are merely signaling, not actually following through with actions to prove your virtue. Virtue signaling is gestural.
Thus when British socialist politicians Yvette Cooper and Nicola Sturgeon said, earlier this month, in reply to questions on the matter, that they would accommodate Syrian refugees in their own homes, skeptics accused them of virtue signaling.
(To date, neither lady has taken in any Syrian refugees.)
It's a handy term for liberal hypocrisy, and seems to be catching on. A friend used it at lunch the other day.
Google searching brings up usages on high-intellectual websites—e.g. evolutionary psychology—from at least a couple of years back (most often spelled with double "l"), but the term doesn't seem to have escaped into more general use until late last year. Ngram has never heard of it, single or double "l," with or without hyphen.
I recommend the expression "virtue signalling" to VDARE.com readers. For example: In conversation with some limousine liberal who tells you about her really pleasant, hard-working, Guatemalan gardener, smile sweetly and say: "Come on, Lucy, you're just virtue signaling."