What does it mean when there is a charge on the cation in a type II polyatomic compound?

Fe(III) means that the oxidation state of that iron is Fe+3. So Fe(II) would have an oxidation state of Fe+2, and there is no Fe(IIIV) oxidation state.

They're usually used in naming of compounds.

FeO is Iron(II) oxide, because oxygen has a -2 charge, so iron has to have a +2 charge.

Fe2O3 is Iron(III) oxide. Oxygen has 3 2- charges, making a total charge of -6. Iron has to compensate by being in the +3 oxidation state.

By definition a cation is a positively charged ion.

Iron does not form actual ions in solid compounds.  The bonds between iron and a "polyatomic" ion are actually polar, but not completely ionic.  We would refer to those bonds as polar covalent bonds.  The electronegativity difference between iron and the oxygen of the typical "polyatomic ion" is around 1.6 which gives the bonds 48% ionic character.  The bonds are midway between the two extremes, as are most bonds.  

All bonds lie along a continuum between "covaelent" and "ionic".  Bonds are neither purely covalent (although a few are) nor purely ionic.  Instead, bonds have characteristics of both.

There are no actual charges.  What you are talking about is the oxidation number.  Iron only exhibits oxidation numbers of +2 and +3.  (There is no such Roman numeral as IIIV.)  The oxidation number does not have a physical significance.  It is useful for differentiating the different bonding possibilities of some elements, as in FeO and Fe2O3.