Clipping is - however you choose to do it - selecting specific clips that you think might be useful for the vid. You can do it on paper, you can do it by actually creating new files, you can do it by selecting segments of a file (which remains intact and does not create another file) to save in your video file and other ways too.

Basically, it is the act of locating precisely where that footage of the lady eating the hamburger or the Enterprise blowing up is for future use.