Neo-Terra was an integral part of the ideology behind the Neo-Terran Front. It was envisioned by Admiral Bosch as a future for the human race in which the home system of the Terrans, Sol, would be replaced by Polaris (the North Star) which once guided sailors safely through the seas. In this theoretical paradise put forward by Bosch, all contact with the Vasudans would be severed and the Terrans would enjoy total independence from the ritualistic Vasudan race. This message prompted many anti-Vasudan Terrans to rise up and join the Neo-Terran cause.
The Utopian society of Neo-Terra is synonymous with the planet in Polaris which would have replaced Earth as the home world of the Terran race if the rebellion had succeeded. The nature of the world is not disclosed, but it can probably be assumed that, if it was to serve as a new Terran homeworld, it would be Earth-like (or at least, not entirely inhospitable), and therefore probably inhabited. Seeing as Polaris fell before the end of the Neo-Terran Front, the possibility of a new Earth in Polaris was most likely abandoned, and the aims of the Neo-Terran Front probably shifted.
In actuality, Bosch's vision of Neo-Terra was far more radical than the GTVA (and indeed, many of his followers) initially believed. Bosch staged the revolt as a smoke screen to allow him to study the Ancient empire and eventually come into contact and form an alliance with the Shivans. This endeavor required a way to reach the Shivans (the Knossos) and a means of communicating with the enigmatic race (the ETAK device). Once an alliance with the Shivans had been formed, it is assumed it would have been possible to banish the Vasudans and rally every Terran to the Neo-Terran banner, creating the paradise of Neo-Terra.
After the events of Return to Babel and Straight, No Chaser, it is not known what Bosch plans to do, if he wishes to continue on with his vision of Neo-Terra, or if he is even alive. Canonically, the future of Neo-Terra remains unresolved and open-ended.