This precept is similar to Christianity's Ten Commandments. Right Action tells people not to kill, not to steal, to be honest, and to have "appropriate" sexual intercourse (though I would say that what constitutes appropriate varies from culture to culture--and here's a link about what the 14th Dalai Lama has said about homosexuality).
Ethical conduct is rooted in Right Action. And as with true ethical conduct, it takes the development of a kind of "moral compass" to know what constitutes Right Action. But basically, it means not to do things that you know cause suffering for yourself or others.