Isat refers to the saturation current. Power inductors are typically made out of ferrite or powdered iron cores, which increases their inductance. However this only works with currents up to a certain point. Basically above a certain current called Isat, the effective inductance of the inductor will start to decrease significantly (by some specified amount, like 10% or 20% in that datasheet), so you would see ripple current increase when the average current is above Isat.
The Irms current rating is roughly the RMS current that the inductor can tolerate without suffering damage. Often Irms is larger than Isat, sometimes it's smaller. Exceeding Isat without exceeding Irms won't hurt the inductor, but the inductor will behave nonlinearly. To simplify things you should aim to keep your current below both Isat and Irms.
If you have trouble meeting your size requirement, consider higher switching frequencies, and possibly interleaving multiple phases.