modding = modification. The more skilled 40Kers will get several models and cut them up to create a unique model with exactly the attributes they are looking for. For example, a modeler might get a Space Marine commander, remove the arms, add arms from another kit, add a weapon from yet another, and fabricate additional features using a sculpting clay such as "green stuff."
Here's an example.
The starting point was a kit that should have created something like this:
But it became this:
The organic bits are all sculpted. The tubes were from something else.