What does RUNNING in ifconfig output mean?

The running state is typically associated with the UP state of the interface, i.e. is the interface turned on, and is there a link over that interface (ip address, etc)

A good way to word it:

RUNNING

     Indicates that the required resources for  an  interface
     are  allocated.  For some interfaces this also indicates
     that the link is up.

One way to change the running state is to stop it, i.e. down the interface.

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It means there is a network link to a switch, ie its plugged in.