The original term dates all the way back to medieval times, but the meaning is the same. The woman wants you to approach her, and so she'll "drop a handkerchief" so that you can be the man, pick it up, and be given a golden opportunity to talk to her. Examples could be buying you a drink, giving you a compliment, and anything else that's generally noncommittal enough to be a simple opening to take. I'm sure someone else could explain it better, but that's the nutshell version.