局 'situation/game' +
外 'outside' = 'outside the game'. Most often appears in
局外人 (júwàirén, an outsider/uninvolved person — compare Camus's L'Étranger, translated 《
局外人》) and
置身局外 (zhì shēn júwài, to keep oneself out of it). Antonym:
局内 (júnèi, on the inside).