I find it to be a real shame about the confusion around the Web as to what the term "sandbox" means. Google, of course, would not admit to it and I do not blame them. But there are so many different definitions of what defines a site to be sandboxed.
I believe we, at the Search Engine Roundtable, was the first information site (outside of a forum) to publicly acknowledge the existence of some form of issue with Google and new sites. The first post we had was named New Sites = Poor Results in Google, that was before it had a name. In a WebmasterWorld thread linked to from the "New Sites = Poor Results in Google" entry, the term "sandbox" came about. Later on, guest author SEO Guy posted an entry here using that title The Sandbox Effect, which helped make its name. Then Garrett French, who was writing at WebProNews wrote an excellent, early recap of all the coverage and named it Google "SandBox Effect" Revealed. Since then the word sandbox has been discussed here dozens of times. But it seems to me based on the forums I am reading, (see this thread and the confusion there), that people do not know that the true definition of a sandboxed site, so here it is.
A site is sandboxed when it is new and does not rank for keyword phrases that are not incredibly competitive (such as a unique company name) in Google after making the page "search engine friendly" and after being indexed.
Some are mistaken that a sandboxed site is a site that has not been indexed by Google. That is wrong. Sandboxed sites are very much so indexed by Google, but have a hard time ranking for keyword phrases, no matter how competitive they are.
How does Google do it? Well that is for an other entry. I have my theories but so does everyone else. :)
Help set the record straight about the definition of the Google Sandbox.