What does it mean when the umpire rotates their arm in the air or in a 'windmill' motion in cricket?

The umpire will signal the start of the fielding side's choice of powerplay by waving his arm in a circular motion - and indicate a powerplay chosen by the batting side by waving his arms in a circle and then clapping his hands above his head.

Powerplay is the term given to a set of overs with special fielding rules during a limited-overs cricket match. During a powerplay, only 2 fielders are allowed outside the 30-yard circle for the first 10 overs in an ODI match and the first 6 overs of a T20 match. There are fielding restrictions evolved through the 1970s, notably in World Series Cricket, and were first introduced in ODIs in 1980 in Australia. The most common rule was for only two fielders to be allowed outside the circle in the first fifteen overs, then five fielders allowed outside the circle for the remaining overs.

During the first 10 overs of an innings, a maximum of two fielders are allowed outside the 30-yard circle (27 meters). This is called the 1st powerplay. Between overs 11 and 40, a maximum of four fielders are allowed outside the 30-yard circle.

From 5 July 2015, the ICC further amended the rules, making the whole innings as a composition of 3 powerplays, thus removing the batting powerplay previously introduced. Furthermore, the restriction of two catching fielders on the first powerplay was relaxed. powerplay rules in a Test Match.