A continuity nod is a reference to some aspect in a series' past or an occurrence within the universe. The nod is not so much a major plot point, but more of a tilt of the hat to the fans that may know these little details.
Sir Terry seems quite on these in the more recent books. My favourite has to be Rincewind taking his sock off in Unseen Academicals (book 37) as nod to the climax of Sourcery (book 5). Talk about playing the long game.