The verb 'Encapsulated' means a component is encased or enclosed by another covering.
In relation to cookware, to improve heat distribution, a layer or disc of aluminum may be encapsulated in another material, such as stainless steel. That is, the aluminum core is sandwiched in between other layers of steel.
Cookware that is three ply or multi-ply usually has an aluminum layer encapsulated in the middle, with an easy to clean interior cooking finish, and a durable exterior layer.
Cookware that is refered to as being all clad, is designed with this encapsulated layer of aluminum, not only in the base of the cookware, but extending all the way up the sides, for excellent heat retention and distribution.