Paraphrasing is describing someone else's idea or ideas in your own words.
Paraphrasing is used to avoid excessive direct quoting and convey the idea expressed in the source using your own language. This is especially useful if the source is long or too detailed.
The challenge of correct paraphrasing is that you need to understand your source really well and at the same time avoid using its original language and structure.
Case Studies (York University at Toronto) - interactive exercises in paraphrasing. Follow the link at the bottom for more studies.