What is "Guttering the peloton"?
Bicycle racing is both about taking whatever small advantages you can, and putting your opponents in as disadvantageous a situation as possible. It's easy to understand this when there is a headwind; in that case, you get the most protection when you are drafting someone else. However, when there is a crosswind, the favored position isn't exactly behind the rider in front. In that case, depending on the strength of the wind and the speed of the peloton, the best position is behind and slightly alee of the rider ahead. Thus, if the wind is coming from left to right, the favored position is behind and slightly to the right of the rider ahead. This is called an echelon, and the riders will be arrayed diagonally from the left side of the road over to the right edge of the road, and they will rotate counterclockwise. If the wind is from the right, everything is reversed. However, the size of the echelon is limited by the width of the road. At some point the echelon is spread across the road and there will be riders in single file right against the right side of the road. Those riders are "in the gutter," and they are not nearly as protected from the wind as the riders in the echelon; their future is bleak unless they can somehow get into echelon.
A strong coordinated team can wreak a lot of havoc on opponents in a strong cross wind. They will put the entire team on the front and make the echelon just barely wide enough for the team, and will place a "gatekeeper" at the end of the echelon to prevent other riders from sneaking in. This will "gutter" the rest of the peloton. Smart riders will start forming new echelons behind the original.
Related Image from team sky.
A video explanation and example is available from Eurosport here.