I heard the term the other day, but it seems strange to me. My understanding is that neutron stars are made up of neutrons; and neutrons (having no charge) shouldn't be magnetised.
In spite of the name, neutron stars also contain protons and electrons. This is required for equilibrium with respect to weak-interaction processes which can convert neutrons into protons and electrons. Since neutron stars also contain protons and electrons, they can contain electric currents which generate magnetic fields. It is thought that the protons actually form a superconductor and the magnetic field in most of the interior of a neutron star is carried my quantized magnetic vortices, much as in a type II superconductor.
The neutron has no net charge, but it does have a net magnetic moment. As an aside, this simple fact provides strong evidence that the neutron is a composite particle (made of smaller things like quarks and gluons), because if it were a neutral elementary particle we would not expect it to have any magnetic moment.
But we know that the neutron is composite, and it definitely has a magnetic moment (it can be measured). Therefore if you have a macroscopic object made of neutrons whose spins are polarized (their angular momentum vectors tend to point one direction rather than another), it will be magnetized. In fact, it will be very strongly magnetized compared to ordinary matter simply because nuclear matter is so much more dense.