According to the glossary on the Maxim website, a "Keep-out zone/area" is defined as:
"The area on or near a CPU or GPU processor that the circuit board layout design can not use, due to thermal management components, cooling, and mounting constraints."
In the efforts to shrink boards down or get the bypass caps closer to high speed parts, it's becoming more and more common to see components located closer and closer together. This is all good up to a point.
Sometimes, it's obvious because the two components just don't fit, as in the close up of the TO-220 and capacitor here. Sometimes, though, it's not so obvious. Violating spacing rules may lead to solder bridges or thermal problems, not to mention mechanical troubles.
Many, but not all, CAD library footprints have a keep-out area specified in addition to all of the other layers. Well, in theory, they should have the keep-our area specified. I bet most don't though.
On the caps in the PCB drawing here, the outer red box is the keep-out zone. Nothing should be in there except the trace going to the part. You might possibly actually be able to place all the parts on this little board, but there are several spots likely to get bridges or have component interferences. Regardless, you could not expect this example to be reliably manufactured anywhere by any method.
Too tight component spacing is one of the most common issues we're seeing these days. I know you need to keep the board small, but for a reliable assembly, respect those keep-out areas and get out your IPC book if you have any spacing questions.
BONUS POINTS: I have a lot of parts spacing issues in the little CAD drawing as well as some other boneheaded moves. The first readers to point out each of the three other big mistakes will get a 10% discount code for use on your next assembly order. Email your answers to me at: email@example.com.
Everybody was kung foo fighting
Those kicks were fast as lightning...
I don't know why, but I've got that song stuck in my head. Ugh.