You say this when someone in an argument scores a hit on you — makes a point so good, or so neatly turns your own words back on you, that you have to admit it. It is a small, sporting surrender: not "you win the whole argument", just "that one landed". Said with a smile, usually, and often with a little laugh, because admitting it is part of the fun. It comes from fencing, where you call out that your opponent's blade has touched you, and English keeps the French sound: roughly "too-SHAY". Common in speech among educated speakers of all ages, and in writing only in dialogue or something chatty. You can also use it about a third person — "Touché to her" — but the plain one-word reply is by far the usual thing. Because it admits a hit, saying it makes you look good-humoured and confident, not defeated.