Retaliate is a cheap, low-level ability in the Other section, a Samurai skill usable by Cloud or Cyan. Retaliate makes physical attacks miss the user and the user counters all physical attacks. There's an exploit where you can attack someone with Retaliate, the attack misses, and they counter attack the enemy. A good strategy for bosses is to have one warrior with Retaliate, a support character with Boost, and at least two characters with Double Cut, two copies on each character if possible. If you use Double Cut on a character with Retaliate, said character will counter attack the enemy twice.
EDIT: Shadow'd. Or Edge'd. Maybe Yuffie'd.