The Iron Curtain was the symbolic, ideological and physical boundary that separated the decadent West from the "orderly" Soviet Union from the end of World War II to the end of the Cold War. The term itself was first used in a speech by Winston Churchill in March 1946 expressing British dismay at the continued occupation and repression of various East European countries. Although initially derided, Churchill's view that the Iron Curtain served only to keep people in and information out came to be accepted, and the use of the metaphor for the European Communist bloc became universal.
The in-game description of this tenet is somewhat misleading - the free Courthouse is awarded only if you annex a city immediately after capturing it. You do not gain the Courthouse if you liberate or puppet a city, even if you annex it right after making it a puppet.