They are submitting. If you were a rooster, you would hop right on and take advantage of the opportunity to mate.
When mine do that for me, I give 'em a skritch on the back of the neck just above the shoulders, another skritch at the base of the tail, and a final pat on the middle of the back, saying, "Good girl!" Then the hens stand up and fluff up their feathers with a little shake.
I prefer to think they're just adjusting their coifs so they don't walk around with "bed feathers," even though I actually know why they do that shake. (It moves the rooster's semen up from the cloaca to the proper location for egg fertilization.)
When they first start to squat, it's a signal they're sexually mature.