What does Caught red handed mean?

The act of committing a crime. When a person is arrested flagrante delicto - while committing a crime - the only evidence required to convict him is to prove that fact.

This is actually the Latin version of “caught red handed”

There is an opinion that the phrase “caught red handed” comes from the fact that when CBI traps somebody, they apply a chemical to the currency and when the offender’s hand is washed, it turns red. This is far from the truth at least by about 400 years. This was used by the 15th Century writer Sir Walter Scott in his Ivanhoe.

This is based on the metaphor of a murderer being caught with blood still on his hands, and so should be as old as the days before guns, when hands, clubs, daggers etc were sophisticated weapons to kill somebody.