In Boxing, the quality of a fighter's "chin" is measured by how much damage he can take to the head before being knocked down or concussed. In general, the term has nothing to do with the Boxer's actual defensive ability or ability to withstand body punches. It is not limited to punches actually landing on the chin though.
There is a very wide range of "chins" in Boxing. Clifford Etienne, a Heavyweight, is a good fighter, but has a horrible chin. In his case the problem spot is not his mandible but his temple. One good (or even brushing) hit there and his legs will turn to jello. This led to a 7 knock down loss to Fres Oquendo and lots of trouble with Frans Botha. On the other hand, there are guys like Arturo Gatti. In his fight with Micky Ward Gatti absorbed tremendous damage in the 9th round but came back to win the 10th. Seeing the punishment Gatti took in that fight is, as Larry Merchant said, humbling.
Some fighters react to a big punch by becoming quickly concussed but can recover within a few seconds. Others don't get KO'd but never "get their legs back", like "Sugar" Shane Mosley in his fight against Vernon Forrest.
Many Boxer's chins are "untested". They manage to simply never take big shots by either blowing away their opponents on offense or displaying an amazing defense.
What makes a good chin? I really don't know. Certainly, in cases like Arturo Gatti it's simply part of their anatomy and can't be reproduced through training. Having a thick neck, like Mike Tyson, certainly helps. Having the trained ability to "roll with the punches" helps, also.
A fighter's chin, along with his "heart", "power" and Boxing ability, is a very important factor that is always discussed before major fights. Someone with a good chin will certainly have a different game plan than someone without one. Of course, even a fighter with a great chin can be knocked out by a fighter with a strong punch who can land it.