If you refuse to take sides in an argument over whether Batman or Superman is the greatest superhero, then you are practicing neutrality. Whether you admire both equally or you simply don’t care, you are a neutral party.
Neutrality can be used broadly to describe individuals or organizations in relationship to any kind of dispute, but it most often refers to countries that don’t engage in war. For example, Sweden has a long and famous tradition of neutrality, as it has not gone to war since 1814. Referees for sporting events are also supposed to work from a position of neutrality — that is, they should never favor one team over another.