What does it mean in a Recipe to "steep the gelatin"?
Steeping the gelatin is the same as just soaking it in cold water. Because the structure of the gelatin is now changing, an other word for this is steeping. 
You need to steep the gelatin until its softened (when using leaves). This will normally not take more then 10 minutes, but just look at the package the gelatin comes in to see what they recommend, and compare with what the recipe tells you. (I don't have experience with powder gelatin).