maxplayers is a server console variable that determines the maximum number of players that can join a game. It cannot be changed while a server is running.
The absolute player limit of Source is 255, though the number supported by most games is far lower. The highest actual player limits are currently found in Garry's Mod (128) and Counter-Strike: Source (64).
The engine can be put into single-player mode by setting maxplayers to 1 before a game starts. This bridges the normal client-server divide in several areas, eliminating latency and interpolation and opening backdoors like the one used by the inverse kinematics system.