folding is a gentle way of mixing a lighter ingredient (such as beaten egg whites or melted chocolate or melted butter) into a denser/heavier ingredient (cake batter, for instance) - ingredients are "folded in" (beaten egg whites for instance) so as to gently mix them in without losing their volume - when folding you want to trap that extra air in the batter -
folding is usually done after the main ingredients of the recipe have been blended together -the lighter mixture is placed on top of the heavier one in a large bowl. Using a clean and dry rubber spatula - start at the back of the bowl, and cut down vertically through the two mixtures, across the bottom of the bowl and up the nearest side; rotate the bowl a quarter turn with each series of strokes. This down-across-up-and-over motion gently turns the mixtures over on top of each other, combining them in the process.
I hope this helps