What does Shakespreare mean by “Suit the action to the word, the word to action”
A modern equivalent would be the maxim "Say what you mean (Explain clearly your intentions), and mean what you say." (Be sincere about it!)
It is interesting that even in theatre, for the scene to be convincing, the actors have to get under the skin of their characters and let the thought or intent rule over words, and not the other way around.
Here in context Hamlet is giving advice to actors who are to perform a murder scene reinacting Claudius' probable fraternicide (pouring poison in the sleeping victim's ear). Hamlet hopes this will provoke his uncle to protest, thus confirming his guilt.
Hamlet has been "acting" too, so in a way he is taking his own advice. He has been feigning madness all along, but he is so emotionally taken up in the task to foil his uncle that he is convincingly 'off his rocker,' caught up in his own obsessional role as vengeance-seeker.
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The context is Hamlet speaking to the players about to perform "The Mousetrap." He is telling them that good theatre comes from acting that mimics real life, that they should not over act, but be realistic in their delivery of lines. This may have been Shakepeare's personal jab at bad actors.