In the Marvel Comics universe, limbo is a sort of parallel dimension where time doesn't flow in quite the same way as elsewhere. Based loosely on the limbo of Catholic theology, it was ruled for a long time by a sorcerer/demon named Belasco, who held absolute power over the demons who lived there.
That changed when Belasco located Illyana Rasputin, the six-year-old sister of the X-Man Colossus. He used limbo's magical "stepping discs" to teleport her and a few of the X-Men to limbo. The X-Men rescued her, but not before Belasco gave her a magical pendant which he claimed would lead her to a powerful destiny as she grew older. The X-Men eventually escaped, but between their world and limbo they lost their grip on Illyana for a moment. When they grabbed her again and pulled her through, Illyana was a teenager, and soon began displaying her own mutant power to control limbo's stepping disks, giving her power over teleportation through space and, occasionally, through time.
During that moment Illyana was out of reach, she spent the rest of her childhood in limbo, sometimes with Belasco and sometimes with older versions of the X-Men who, in a branching timeline, failed to escape limbo themselves. (Again, time flows differently there, and sometimes loops back on itself.) Eventually the magic Belasco and others taught her gave Illyana the power to create a "soulsword" out of herself. This soulsword empowered her to drive Belasco out of limbo and take control of it herself. It was after this that she was able to return to earth with the X-Men.
From that point on, the soulsword became the figurative and literal symbol of the ruler of limbo. As long as it remained in limbo, Illyana retained power; when she took it to earth with her, other demons were able to exert their own influence. One, a former servant of Belasco named S'ym, eventually rallied the other demons to mutiny and was able to take the soulsword from Illyana. His goal was to permanently join earth and limbo; Illyana eventually stopped him by sacrificing herself and, through means never fully understood, reverting herself to a six-year-old child who had never grown up in limbo at all.
The soulsword continued to exist, and whoever wielded it was given power over limbo and all its denizens. When last it was seen, however, it had no owner.
In a less official sense, "limbo" is a term used by the fans of comic books and other storytelling universes to describe where a character is who hasn't been used in some time -- either because the writers have forgotten about him, they have him between adventures, or they just don't know what to do with him and have stuck him on the back burner for a while.