Navcloud is used to define the area where drones can move, and to provide them wiht environment data they need to navigate around.
Before you generate a navcloud it's recommended to set it's boundaries to avoid creating larger volumes than needed. This is especially important if you make a large level where only part of the area is actually playable. To set the navcloud boundaries you need to first add the 'Nav Cloud Boundaries' component to a new empty gameobject in the scene. When that object is selected, it will display a yellow cube widget in your scene for adjusting the navigation volume's placement and dimensions. The red volume displays the actual navigation volume that will be generated.
Navcloud can be generated from the Levelkit Tool.
If you don't have a Navcloud Boundaries set up in your scene, generating navcloud will generate it for the whole scene volume (which can take a long time for a large level).