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A "variation order" is most often when some extra work gets added to a project after the contract has been signed.
For instance, I contract to paint your house, and we agree on a price. Then you ask me to paint the shed too.
That's extra work and materials that weren't in the original agreement, so it will be added to the contract and the final cost.
It could also be additional work needed for hidden problems that weren't apparent at the time of the contract.
Like maybe I contracted to replace your windows and when I get the old window out, it turns out that the framework is rotted and has to be replaced. That work wasn't part of the original agreement and price, so I'll ask you to sign a variation order that states you're going to pay me for the additional work.

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Who is involved in a variation order in construction?

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