The Master Narrative is more commonly called a Metanarrative. It's not a specifically literary term, but certain texts could be analysed in terms of a master/metanarrative.
The simplest way I can think to explain it is that it's a particular way of explaining everything that happens in a society. It is an ideology which seeks to explain every aspect of a civilisation from its own perspective. Societies function because people will hold similar metanarratives to be true, which gives people a common way of explaining, judging and functioning within society.
Some possible examples of master narratives/metanarratives could be feminism, Marxism or certain extremely fundamental religious groups. Each will try to explain (and influence) every element of society... the roles of men and women, how an economy should work, what language should be used etc. etc.
Some literary texts can therefore be analysed in terms of a master/metanarrative - for instance, if a novel were to be highly pro-feminism it could be analysed in terms of what it is saying about that particular metanarrative. Or if a literary text seemed to exemplify all of the key aspects of a particular metanarrative then that could be analysed.
Hope that's of some help - really difficult to explain!