Piping is simply the act of passing the standard output (usually printed in the terminal) of one program as standard input to another program, e.g.:
pipes the output of ls -l to less so you can scroll through it, e.g. when listing a directory with lots of files.
Another example:
Code:
echo "The cat climbed the tree" | sed -e 's/cat/dog/'
prints "The dog climbed the tree" since the echo output is passed as input to sed.