From what I have noticed, the term refers to positive feedback loops, at times mockingly. Members of a community, whether small or big, share a positive opinion about their community or what their community centers around. Because the specific, commonly positive, opinion stays within that specific group or community, there is no feedback or counterpoints from an outsider perspective. In other words, they won’t get anyone speaking against their opinion. It basically reinforces their individual belief systems.
As the Wiki entry for Echo Chamber reads: “the effect is a situation in which information, ideas, or beliefs are amplified or reinforced by transmission inside an “enclosed” space."
These circlejerk discussions are often started on purpose by communities, to increase community morality. Users give the community positive feedback, without the input from those that disagree, to give themselves a better overall impression of that community than is really the case.
Which then can be combined to the IRL meaning of a circlejerk, a group of males in a circle jerking of (whether themselves or each other). The event only functions to pleasure those within that circle of males, similar to the positive feedback circle functioning to make the users feeling better about themselves being part of that community.
I had ideas to make this entry around a month ago, but got occupied. Glad to see the staff had a similar idea to give it an entry.