This is spoken by the First Witch to the other two Witches in Act I, scene iii. First, it should be noted that, in stage time, we see and learn much more about the Witches in Act I than in all the rest of the play combined. They do have a significant scene in Act IV, but they are, at this point in the play, about Macbeth's business and not there own, so they don't really stand alone as characters in the same way that they do in Act I.
In this quote, the First Witch is describing how she plans to torment a sailor, the unlucky husband of a woman who had "chestnuts" and would not share them with the First Witch. The First Witch, as stated in the above quote, plans to make sure he cannot "sleep" for a number of days, and, because of this lack of sleep (which is necessary for all humans), he will waste away and become sicker and sicker as a result of the curse she puts on him.
This story would have had great significance to Shakespeare's audience in the early 17th century, for witch hunts were afoot in Europe. As they did in the American colonies, in Europe they created a sort of epidemic of fear of strange behaviour and accusations of witchcraft for natural ailments and sicknesses. Shakespeare alludes to that here -- as a witch describes how, in retaliation for not getting what she wanted, the husband of the woman who treated her poorly is "taken ill" and mysteriously seems to waste away. The witch's curse, in this case, would be responsible for this.
Please follow the links below for a paraphrase of this quote, plus more on this scene and witches in Elizabethan England.