Mobile devices should react to user behaviors, movements, and the relationship of the device to the user in a natural and understandable manner.
Kinesthetics is the ability to detect movement of the body, although ususlly applied in a sense of self-awareness of your body; here it refers to the mobile device using sensors to detect and react to proximity, action, and orientation.
The most common sensor is the accelerometer, which measures acceleration along a single axis. In modern mobile devices, accelerometers usually contain detectors for all three axes mounted to a single frame.
Kinesthetic gesturing is a matter of detecting incidental or natural movements and reacting in appropriate or expected manners. Unlike on-screen gestures, which form a language and can be easily abstracted, kinesthetic gestures are all about the environment and how the device lives within that context. Is the device moving? In relation to what? How close to the user, or other devices?