What's the definition of Term
"Spouse Works" is not a term. It is an incomplete sentence. The complete sentence would be "Your spouse works." or "My spouse works." This means, "your/my husband or wife (spouse) has a job (works)".
The creators of the form left out words in the naming of the section.
Whether your spouse works is relevant because your tax rate depends on your total household income if you are filing taxes jointly (together) with your spouse.
This block is to determine whether taxes should be withheld as if the job for which you are filling out the W-4 is your only household income, or whether there are multiple jobs contributing to household income. The shorthand "Multiple Jobs or Spouse Works" is spelled out in more detail immediately at right:
you (1) hold more than one job at a time [i.e. multiple jobs because you personally work two or more jobs]
or (2) are married filing jointly and your spouse also works [i.e. multiple jobs because both you and your husband or wife have a job]
If you are married but your spouse is not otherwise a U.S. tax filer, you would probably file as Married Filing Separately rather than Married Filing Jointly, and your spouse's job would not be counted here, but you would need to review your own tax situation to deterimine your best option. See for example