The Sybil attack in computer security is an attack wherein a reputation system is subverted by forging identities in peer-to-peer networks (wikipedia).
In the context of Sia this would map to someone setting up a large number of “forged” hosts. Forged in the sense that they would all map into the same backend hardware and be controlled by the same person.
Sia network consists of 1542 hosts providing 1.5 PB of storage.
A sybil attacker could announce 9000 new hosts all mapping to the same hardware and hereby having a dominant number of hosts on the network to abuse.
The defence of the sybil attack as stated in the wikipedia article is to make it infeasably costly to forge hosts, hence the proof of burn for Sia.