"XYZ" stands for 3 bids made at the 1 level, such as 1-1-1 or 1-1-1N.
There are also several combinations of such bids when opponents intervene, such as
If opener makes his second bid on the 1 level, XYZ is on.
Responder can then make one of the following bids:
To sign off in 2D, first bid 2 (relay to 2) then pass.
2 = relay to 2 then bid 2//N as invitational.
2 = any other game force.
To make an invitational bid, responder bids 2 first and then any bid after opener's 2 is invitational.
For example, in the Feb.2017 Bridge Bulletin, p.38, The Bidding Box:
T7 832 AKQJ8 T72
The bidding went
1 - 2 (XYZ)
2 - 3 (invitational)
Pass (for a top)
In the March 2017 Bridge Bulletin, p.42, #3, with Q32 AKQ64 T43 42 and bidding of
1 - ??
Bids by the panel were all over the place and the reasons for the bids were painful.
In XYZ, a bid of 2 at this point transferring opener to 2 makes the next bid of 2 invitational and is clarified better than by bidding it without XYZ.
Larry Cohen adds the following XYZ tip on his web site: