To create fine threads of an ingredient by passing it over a serrated surface. This is usually accomplished with a grater, which is a flat piece of metal with notches cut in the face. The size of the notches determines the size of the threads of food. Shredded food is usually thought of as being a larger thread while grating creates a finer one (that can even be as fine as powder).
Food processors are equipped with blades that can also be used for grating (usually more of a shred). Foods that are to be grated should be firm. For instance, cheese that has been refrigerated will grate easier when passed over the surface of the grater.