To decrease a stitch simply means subtracting it from the number of stitches in the row for shaping and design. Different techniques of decreasing allow you either to make them hardly visible or, on the contrary, create the holes in the knitted fabrics to make it look decorative. There are three the most often used methods of decreasing stitches in knitting.
To work two stitches together in the knit (k2tog) or in the purl (p2tog) row. It produces a right hand slope on the knit side of the material. To make it, insert working needle thought two stitches at once, then knit (or purl) them as if they are one stitch.
To knit or purl two stitches together through the back of the loops (k2tog tbl or p2tog tbl).This method produces a left hand slope .
The third method is a slip stitch decrease (sl 1, k1, psso), which also creates a left hand slope. This method is often used instead of working through the back of the loops, as it is easier to do. To make (sl 1, k1, psso - SLIP ONE KNIT WISE, KNIT 1, PASS SLIP STITCH OVER): slip the first knit-wise, knit the second stitch, then pass the slipped stitch back over the knit stitch.
Video below demonstrates all three methods of decreasing a stitch on a knit and purl row (double click a lower left button). Video about increasing stitches can be found at Increase a Stitch page.