Loc means Locator. A locator is a system to indicate locations. The idea to exchange locations an longitudes and latitudes is not a good idea for Morse code because there are too many ways to use them, e.g. the use of signed or unsigned longitudes, the use of degrees and minutes, the use of fractional degrees, etc.
Usually, in ham radio Loc refers to the world wide Maidenhead locator system. Each place on earth can be assigned to a locator with arbitrary precision. The format is two letters from A to Z followed by two integer numbers from 0 to 9. Optionally these 4 characters may be followed by zero or more alternating pairs of letters and numbers. The longer the sequence, the higher the precision. For details enter the key words "Maidenhead locator" to a search machine on the Internet.
Please note that it is not a normal habit to exchange such locators in CW contacts on short wave. However, on 50 MHz or higher the exchange of locators is a very common standard.
The Loc exchange is part of this text because of its prominent role in the EUCW game "Snakes and Ladders".
In Europe, usually 6 characters are given such as JN18EU in Paris or KO85TS in Moscow. Such grid fields have a width of 2 degrees in longitude and 1 degree in latitude. One degree in latitude is a nautical mile, the width of the fields depends on their position. In America, the use of 4 char fields seems to be more common. Likewise, the EUCW game "Snakes And Ladders" requires just 4 char Locs.
At times the Loc is called QRA by elderly hams who can still remember the old European locators with 5 chars such as EI12e. These old locators were replaced by the Maidenhead loc in the early 80ies.
Other common terms for the Loc are simply "grid" or WWL (world wide locator), we recommend "loc" in CW.
A majority of ham radio operators do indeed know their locator. In Britain, a common replacement is the WAB code. WAB code is based on planimetry. In most (but no all) cases a 4 letter WAB code can be assigned to a 4 letter loc because the latter cover far more surface than the former. To compare 4 letter WAB with 6 letter loc is very difficult because the borders of the fields do not coincide.
For those who participate in Snakes and Ladders it may be difficult to make educated guesses of Loc fields, the only solution is to ask for the loc directly or to ask for precise qth indications. Note that in many countries such as Spain and Italy, most CW hams use their provincial capitals as QTH indications which may be too approximate to guess the 4 digit loc. This problem is even more present in big countries like the Ukraine and Russia. However, these op are always willing to indicate their URDA or RDA code which are often easy to convert into a loc.