In electronics and especially audio, it's a phenomenon in which a
waveform that would normally
be rounded is squared off. For example, a normal sine wave might look
sort of like this:
-^- -^- -^-
~ ~ ~ ~ ~ ~
/ \ / \ / \
/ \ / \ / \
\ / \ /
~ ~ ~ ~
-..- -.-
But one that is clipped has the highs and/or lows squared off:
----- ----- -----
/ \ / \ / \
/ \ / \ / \
\ / \ /
----- -----
When an audio signal is clipped, the sound that is produced is nasty,
distorted,
and shrill due to the introduction of ugly high-frequency harmonics. One common cause of this is driving an amplifier
too high, which bumps up against the finite output level the amp is capable of,
and the highs and lows are simply chopped off squarely. This can be hard on your speakers, so turn it down!