A siima is basically a boundary. There are many different types of sima. The most common one is the boundary surrounding the Uposatha hall (Bot in Thai). There are usually 9 stones which are installed in during a ceremony with Pali chanting etc when they are laid. Formal monastic matters (sanghakamma) are undertaken within the boundaries. This includes ordinations and Patimokha recitations. They were probably developed because unanimous decisions need to be made by the monks so it was necessary to make a boundary to exclude those not participating in the ceremony.
Simas can also be defined by natural barriers such as water (eg an island) or bush.
Many controversies have occurred around centering around sima. King Mongkut, before he was King had many boundary sima stones in Thailand dug up and he concluded they had been placed wrong. This threw doubt on the validity of the ordinations performed in these simas.
In Sri Lanka the Siyam Nikaya, the lineage imported from Thailand, split into two because of a sima dispute. Ordinations were being conducted in the Kalyani river on a small raft. A plank had been placed so that monks could walk over to the island sima. A small gap was left between the raft, but one faction said that this encroached on the sima and made it invalid and therefore the ordinations invalid.