Someone who's guarded is careful, restrained, and maybe a little bit wary. It's normal for a new rescue dog to be guarded when you first bring her home.
People tend to be guarded in certain situations — when they're being criticized, or are at a party where they don't know a single person. Others simply have guarded personalities, always starting from a position of cautiousness. Guarded can also literally mean "protected," like a guarded castle, but you'll more often find it describing a restrained person.