Calling someone "Squirrel" in this context is calling them a dirty name.
It means someone who has taken the Scientology teachings and altered them, or is doing them "wrong", meaning not paying the COS to do them...
...people have been altering and adapting Scientology practices to their own needs, so that it works better or makes more sense to them, in other words practicing Scientology independently since Dianetics was first written in the early 50's...
...this of course cuts into the COS general income...and is considered a serious crime in Scientology culture.
You will see squirrel jokes and funny pics, etc. here and elsewhere as a means of taking back the term...I used to have a squirrel avatar.
So "Squirrel" means any use or alteration of anything Scientology outside of the official Corporate Scientology of COS. Meaning is "enemy", "traitor", "criminal", "thief", etc. You do know you're learning about a real Cult...total "us and them" mentality.
Yes, Ron created a lot of jargon to give his group that inner circle special feeling of belonging, to make people feel they were doing something productive and useful when they spent hours with a Scientology dictionary word clearing his writings...
...and to help create an aura of mystery about the whole con job. If you don't call "Body Thetans" body thetans (BT's) what are you going to call them? The closest terms in real, common language are either ghosts, demons, or dead space aliens that are clinging to you in clusters and causing all of your aches, pains and problems... how are you going to sell the "spiritual technology" of shooing them away, at a huge price, to the masses of ordinary people looking for some answers for their problems in life??? It sounds just as crazy as it is, when you put it in plain English. Talk about a hard sell!
Besides, it's too much of a fun game if you have made your living as a Sci-fi/pulp fiction writer making stuff up for much of your adult life, to create all this space opera stuff and package it as a new technology of the mind and the only answer to mankind's problems, and the REAL spiritual reality...that only you have seen and can show to others.
Lots of fun to make it up as you go along (which Ron did constantly) and change things to whatever worked to attract new paying customers, keep people interested and involved and working for you and paying you money! And getting other people to pay you money! Which was the whole point of Ron's creating COS.
There are several Scientology glossaries available on the Internet and you can always ask if you encounter a term that you do not understand. Most people here will tell you to go look it up, rather than explain to you what it means (to them), because they were indoctrinated to think it's a crime to talk about the meaning of words, or even the meaning of Ron's writings, which are not discussed openly in COS. (No verbal tech.) You either understand it and accept it as Ron meant it or you don't...Which means you totally accept and allow Ron's thinking, ideas and values to become your own, the more and more you "study" Scientology in COS. A lot of the folks "in" who don't understand or accept it pretend that they do, as in the story of the Emperor's New Clothes, so as not to get into ethics trouble. It's a CULT.
Scientology was designed to be really obscure and confusing and secretive, with constantly evolving practices and more and more new "upper levels" to attain... (the "highest levels" still have not been released, until COS members cough up enough money to make so many "Ideal Orgs" in the world...a form a spiritual blackmail)
... to make people feel as if they were really gaining something of value for their time, money and effort...when in reality...it's a LOT of created fantasy using a lot of made up words to get people to cooperatively agree with the reality that Ron was selling them, to work for him and make a lot of money for him.
Ron is gone but the con goes on...all because of the money to be gained, tax free!