An instrument might be "acoustic" as opposed to electric (though these days the distinction is somewhat more blurred); a performance might be "acoustic" as opposed to amplified; a style of music may well be "acoustic" ie using primarily acoustic instruments where you might expect electric / electronic ones: eg acoustic blues, acoustic pop, acoustic techno.

Without further definition of terms, it's a pretty vague concept (just like folk music). Technically speaking, a drum kit is an acoustic instrument. Nearly all classical music- and a lot of jazz- is acoustic. And, ironically, a lot of "acoustic" music is in fact reliant on amplification (an observation, not a valued judgement)

I think part of the problem with the A-word, much like the F-word, is that as well as having specific meanings, it's also used to denote "anything by a singer-songwriter, or a bands with an acoustic guitar in", which at best tells you nothing much about the music.

(Just for clarification, I play both kinds of music, folk AND acoustic..)