I had heard this from someone who was saying this to her dogs. As 'upto' has different meanings and those meanings do not fit in this sentence. So what does it mean ?
"Upto" is not a word, but two separate words, "up to":
What are they up to?
To be up to something means to be doing something. It often (but not always) carries a connotation of mischief or adventure. In this context, the owner was asking what the dogs were doing, with the suggestion that maybe they were getting into some mischief or adventure.
"What are they up to?" (note space between "up" and "to") means "What are they doing?"
With the dogs being near enough for her to speak to them, she might be implying that the dogs are doing something sneaky or disobedient.
This could also just be cutesy talk (like baby talk) to beloved pets, similar to "Who's a good dog?" or "Who is my snoogie-woogums?" This sort of nonsense talk involves asking questions with obvious answers and silly pet names, just as a way to interact with the dog (or baby).
Her tone of voice would be your key to deciding whether she is suspicious of the dogs or being playful toward them.
'Up to' is two words, not one.
'What are they up to?' means 'what are they doing?'
It often (but not always) implies that the person asking the question is suspicious and thinks that someone is trying to do something bad. For example, if you saw some strangers outside your neighbour's house looking at all the windows and doors, you might wonder what they are 'up to' – are they planning to break into the house, or are they there for some other reason?
However, this is not always the case. You might also use it if you see someone doing something but you don't know why, or you just want to know what they are doing. For example, if I walk into the kitchen and my mother is there, she might ask me 'what are you up to now?' She is not suspicious of me, but she is just interested in me and what I'm doing.
Another potential situation for this phrase: if you meet an old friend for the first time in years, you could ask them 'What have you been up to?', meaning 'What have you been doing with your life?'
In this context, like in "what's up?", I think that the word "up" means "happening". Hence, "what's up?" means "what is happening?".
"What are they up to?" means "What are they doing?".