The Collaborative International Dictionary of English v.0.48:

Squat \Squat\, v. i. [imp. & p. p. Squatted; p. pr. & vb. n.
   Squatting.] [OE. squatten to crush, OF. esquater, esquatir
   (cf. It. quatto squat, cowering), perhaps fr. L. ex +
   coactus, p. p. of cogere to drive or urge together. See
   Cogent, Squash, v. t.]
   1. To sit down upon the hams or heels; as, the savages
      squatted near the fire.
      [1913 Webster]

   2. To sit close to the ground; to cower; to stoop, or lie
      close, to escape observation, as a partridge or rabbit.
      [1913 Webster]

   3. To settle on another's land without title; also, to settle
      on common or public lands.
      [1913 Webster]

WordNet (r) 3.0 (2006):

squatting
    n 1: exercising by repeatedly assuming a crouching position with
         the knees bent; strengthens the leg muscles [syn: knee
         bend, squat, squatting]
    2: the act of assuming or maintaining a crouching position with
       the knees bent and the buttocks near the heels [syn: squat,
       squatting]