Staccato means you play the note shorter. It's indicated on sheet music with a dot under the note. If you see 4 quarter notes with dots underneath, you don't let them ring out for the full beat. The opposite is legato, where you play the notes for their entire full length and transition between notes in a smooth and flowing sort of fashion. As mentioned, proper note length is key to establishing a groove in any style of music.
To get the staccato sound this guy is doing, you can use a combination of mostly left hand muting to deaden the string just after plucking the note. The first thing to try would be lifting your fretting finger up just a bit after you pluck the note, leaving the left hand in contact with the strings so the note does not sustain. You can also use the other fingers on your left hand to accomplish the same thing on faster passages. Let's say you fret the note with your index finger, you'd use the middle and ring fingers as your mute, bringing them down over the string to stop the note from ringing. Like anything, use a metronome, start slow and gradually build up speed.