Define toning

I interpret it as your body being firmer and the only way to do this is to lose fat, so your muscle is nearer to your skin (i.e. not covered in a layer of jiggly fat) - others may disagree, but that's how I see it!

isnt it like spot training?

the people i know who use that term will say things like "i need to tone up my triceps" or "i need to tone my inner thighs" and will pick up a weight lighter than a can of soup, will do a trillion and 1 tricep kickback or sit on the hip adduction machine and will do a million reps of that. the idea is hat somehow all that arm movement or leg movement is turning the fat into muscle.

Getting body fat low enough to see more muscle definition.
Going for the "shrink wrapped look".
Prime cuts.

Doing muscle involved exercise is toning. It can be crunches for the abs or it can be lifting heavy weights. It's about building the muscles.

The muscles can be strengthened even though there is a layer of fat covering them.

If you want to see the tight, toned muscles in all of their glory, then you would have to reduce the body fat also.