If you crouch down very low and sit on your heels, you squat. If you have to talk to a small child, you might have to squat to talk face-to-face.
The verb squat also means to illegally occupy a building — especially to live in it. If you own vacant property, you need to be careful that someone doesn't decide to squat in the empty house. As an adjective, squat describes someone who is very short and thick. In the movie Snow White and the Seven Dwarfs, the dwarfs are depicted as squat little men.