The word "touche" originates in the French language and is commonly used to acknowledge when a person makes a particularly poignant or witty point in a discussion or argument. It is typically made with an air of triumph over the other person in the conversation. The literal translation comes from the French past participle "toucher," which means "to touch."
Another use of the word "touche" is in the sport of fencing. It acknowledges a hit by a fencer's opposition and is spoken by a person admitting defeat. In both applications of the word, the intent is to concede that the other person has won, but the tone and underlying emotion is generally good-natured.