on, forces gdb to assume that GDB was started in a terminal. In practice, this means that gdb should wait for the user to answer queries generated by commands entered at the command prompt. If
off, forces gdb to operate in the opposite mode, and it uses the default answers to all queries. If
auto(the default), gdb tries to determine whether its standard input is a terminal, and works in interactive-mode if it is, non-interactively otherwise.
In the vast majority of cases, the debugger should be able to guess correctly which mode should be used. But this setting can be useful in certain specific cases, such as running a MinGW gdb inside a cygwin window.