What exactly is 'clipping?'

[Anova]

It's more or less a high level strategy of MP and damage optimization. Essentially, you are trying to optimize the damage you can do and your MP efficiency as much as possible.

When you 'clip' a dot, you are essentially resetting the cd on it. It's not optimal because you have to wait 2.5 seconds that could have been used on an ability with more damage or some other effect (such as a better crit buff in the case of BRD dots or burst damage from BLM thunder). And because it's included as part of your damage rotation, it basically applies to all classes/jobs with a dot ability (even healers). You basically want to keep dots up at all times, refreshing them at the last possible moment (or when they can give you an additional effect that you consider to be useful).

Feel free to read up on SMN guides and damage rotations to see where players like to put them. You don't have to do it their way, but you should at least understand the reason why it's done, so you can at least justify your own rotation.