I heard the term before, although I didn't quite understand what exactly they were supposed to be. I think that Houou (Ho-Oh) was considered to be one, but I can't remember for sure.
Basically, they were a rumor that was highly prevalent during Gen I (Kanto) and II (Johto), but slowly died out during the days of Gen III (Hoenn) and Gen IV (Sinnoh) although some similar rumors do persist. The rumor stated that certain fully-evolved Pokémon like Venusaur, Charizard, and Blastoise, as well as Nidoking, Nidoqueen, Gengar, Machamp, and more, could evolve even further into absurdly-powerful Pokémon called Pokégods. The "methods" for evolution were often convoluted, tedious, and absurd, such as battling the Elite Four 100 times, walking 20 laps around Cerulean Cave, then giving a Fire Stone to your Dragonite. However, Gen VI (Kalos) would introduce Mega Evolution, which did allow Pokemon that had already evolved twice, such as Alakazam, to evolve further for a short amount of time. Also, the last three generations have added some very strange evolution methods, like leveling up past Lv30 with your device upside-down (Inkay), leveling up knowing Dragon Pulse (Which Poipole can't learn without the move Relearner), or taking 49 damage without healing then going under a specific arch (G-Yamask).