Often used to acknowledge a valid counter argument or contradictory statement, the word "touché" is a variant of the past participle of the French term "toucher," which simply means "to touch."
This same term is commonly used in the sport of fencing to acknowledge an opponent making contact. More commonly in daily speech, it is simply a way of ceding a point or giving a person their due when they've made a particularly clever comment. For written documents, the accent mark over the "e" is important. The same character can be entered on your keyboard using a combination of the alt key and the number keys 130.