"Zulu" time is that which is more commonly know as "GMT" (Greenwich Mean Time). Our natural concept of time is linked to the rotation of the earth and we define the length of the day as the 24 hours it takes (on average) the earth to spin once on its axis.
"Zulu" is the word used by NATO and perhaps other armed forces for the letter Z when spelling out words: alpha, bravo, charlie, delta . . . yankee, zulu.
After a time, "Z" designates Greenwich Mean Time, so what you heard as "twelve-twenty zulu" would be printed or written as "1220Z [no colon]." It means 20 minutes after noon at the Royal Observatory in Greenwich, London, England, not in local time.
I think that the 24 time meridians around the world have all been assigned letters (probably omitting I and O), with Z = 0° longitude or Greenwich mean time. Thus, when it is 1220Z, it is 1320A ("European time") and 0720U (U.S. & Canadian "Eastern time").