This is when you mask or hide the actual domain URL from the web browser. An example would be that NO MATTER what page you clicked on (blog, about, faq, domain names etc) it would always say the root domain name (website.com for example) in your web browser.
How this is used
People use masking as a way to forward their unused domain names to a built site. The real estate world is common for this.
Real estate companies will build domain specific sites for homes or properties. Once those properties are sold, the domain becomes useless. With domain masking you could then forward that domain to another property listing or website. Rinse and repeat. The advantage is you can have many domain names all ranking in Google that when clicked on forward to a website (but without changing the URL in the browser).
So to put it another way, you can end up with multiple domain names ranking in Google. Each one without a website of its own (as it forwards to a website).Home » Domain Names For Dummies » What is Domain Name Masking?