"Cytoplasmic localization" is a very general term and it means that something is localized in cytoplasm. For instance (hypothetical but there are known examples), you can say *protein-X is localized to cytoplasm* or the *cytoplasmic localization of protein-Y is reduced upon phosphorylation*. Similarly, there are terms like "nuclear localization", "ER localization", "mitochondrial localization" etc.

The usage mentioned in your excerpt is actually unclear and misleading. There is no *process* called cytoplasmic localization. What it actually means is that there are proteins/RNA inside the cytoplasm of the embryo that are asymmetrically distributed. When the cell divides, these molecules are therefore asymmetrically sorted to the daughter cells. Depending on what molecules the daughter cells receive, different cells adopt different phenotypes.

I am not sure which book you are following but [Developmental Biology by Scott F Gilbert][1] is a good book and explains these processes nicely.


  [1]: http://www.ncbi.nlm.nih.gov/books/NBK9983/