It means to shift lower in the rpm level. If you're normally shifting at 10,000 rpm when you're riding at a spirited pace, then short-shifting would be shifting at 6,000 instead to ride the torque wave, instead of trying to stay at peak horsepower.
It's something you have to do when you're in the frigg'n break-in period of a really great bike that you can't have fun with yet cause you're supposed to keep it under a measly 5k rpm even though that's only 60mph in 6th gear and some of the highways around you have 65mph speed limits and hell for that matter I ride at 60-90 on the twisties so how the hell am I supposed to have any fun when I have to short shift it through six gears in all of ten seconds?!!!! /images/icons/crazy.gif
/images/icons/frown.gif Can you tell I'm getting frustrated with my new bike's break-in period?
You'll hear short shifting more often in racing. Often racers short shift just before entering a long, increasing radius left hand turn. Because the turn is increasing radius, you accelerate through the turn, so sometimes you would need to up-shift right in the middle of leaning over on the left side. So instead, racers will up-shift a little earlier in the rev-range. Although it costs a little horsepower, it is beneficial because you don't have to worry about up-shifting while at maximum left lean angle.