hi.

1.6ltr means the cubic capacity of the engine that is 1600cc.

1.6 Ltr or 1600cc refers to the engine's capacity which is the dispalcement volume of the pistons of the engine. More is the capacity or displacement of the engine, more is the power and provide greater torque at low rpm and the fuel consumption is also more.  

You all folks who wants to know how engine works visit-

http://auto.howstuffworks.com/engine2.htm

i.6 litre means a 1600 cc engine.