Alocao' is a colloquial, shortened form of "enloquecido" or "alocado," meaning 'crazy' or 'wild.' It's often used to describe someone who is acting impulsively, excitedly, or without much restraint.
In the context of the song, Eddy Lover sings, "Que sepan que andamos Alocao'" (Let them know that we're going wild/crazy). It perfectly captures the carefree and passionate mood of the song, where the couple doesn't care what others think and is fully immersed in their love and fun.
Eddy Lover opens with the obvious: everyone already knows. "No es un secreto" (It's not a secret), he sings, then names exactly what gives it away, "Que tú me vuelves loco / Que me enamoras, ma'" (That you drive me crazy / That you make me fall in love, babe). The chorus stays physical rather than poetic, "Boca a boca, muah" (Mouth to mouth, muah), and the couple dances until, as he puts it, "Nadie / Nos quita lo bailao'" (Nobody / Can take away what we've danced). The night itself becomes the proof.
The second half turns the mood over. "Pétalos caídos, una rosa vieja" (Fallen petals, an old rose) replaces the champagne-and-dance-floor imagery with something wilting, and he admits "Que a la distancia no se cura el amor dejado" (That love left behind isn't cured by distance). It's a small, honest crack in an otherwise loud reggaeton love song: even a relationship this public still has to survive whatever pulls two people apart. Then the hook comes back around, "Que se repita mañana" (That it repeats tomorrow), and the song settles on wanting one more night exactly like this one rather than promising forever.