Basically, in insulation testing is applying a voltage (specifically a highly regulated, stabilized DC voltage) across a dielectric, measuring the amount of current flowing through that dielectric, and then calculating (using Ohm's Law) a resistance measurement. The resistance measurement is in megohms. This resistance measurement to evaluate insulation integrity.
Current flow through a dielectric may seem somewhat contradictory, but remember, no electrical insulation is perfect. So, some current will flow.