Not straying far from its Latin root terra, meaning "earth," terrestrial means "of the earth." If it's terrestrial, you'll find it on earth. If it's extraterrestrial, you'll find it emerging from a UFO.
The adjective terrestrial can also be used to describe something that lives on land (as opposed to living in water, for example). "On their trip to the rain forest, the scientists were charged with cataloging terrestrial animals. Another group was going to be in charge of cataloging the aquatic animals." The adjective can also be used to describe something that is mundane in character. The teenager cried, "My life is boring and full of terrestrial events like going to band practice and to class!"