While originally otter refers to a semiaquatic, carnivorous mammal from the weasel family, in the modern day context it is encountered related to LGBT subjects.
The term “otter” is a slang expression for a slim, hairy gay man; a person with a bigger body mass, but who is similarly hairy is called a bear.
A related expression for a homosexual man, with a thin physique is naked otter or shaved otter.
The association of gay men and animals come from the book by George Mazzei, “Who’s who at the zoo?” published in 1979. The term is yet unused here; the animal associated with hairy, gay men was bear.
“Otter” had derived from the bear analogy, during the 1980’s, seeing as how both animals are distinguished by their fur; while bear is holding a much larger body mass, an “otter” is a lot smaller and tinier, thus more fitting to be applied for hairy men, who are not carrying “luggage”.
The term “otter” is mostly unknown to people, who are unaware of the terminology, endorsed by the members of the LGBT movement.
People are more familiar with a derivate of the expression; naked otter, as in 2017 it turned into a popular prank to make people Google search the phrase.
Urban Dictionary has a couple of useful definitions and entries on the subject: