Simply, you keep the targets moving so they can't hit you, usually. Sometimes the word "kite" is used incorrectly to just describe movement of the target, but it's proper usage is to keep the target moving without letting it hit anyone.
I am the man who arranges the blocks that descend upon me from up above They come down and I spin them around and they fit in the ground like hand in glove
Basically, it is holding the mob's aggro without letting it hit you or anyone else (usually). This way, the mob stays occupied on one person, and limits their damage. Frost mages used to be used a good amount of the time to kit mobs.
BREAK IT DOWN KIRBY!! (^'-')^ (^'-')> (>'-')> <('-'^) ^('-'^) (^'-')^ (^'-')> (>'-')> <('-'^) ^('-'^)
Think of it as flying a kite. You are you and the kite is the creature you are kiting. You hold the aggro and pull the creature with you as you move. DPS typically do this to distract an enemy so the rest of the group can focus on another target. The use of CC to slow or stop the movement of a creature can aid in kiting especially when dealing with enemies that are faster than you.