What exactly is "vegetable shortening"?

In baking, the term "shortening" alone is used to mean any fat; "vegetable shortening" is a fat made from vegetable oil to be solid at room temperature.

Most vegetable oils, such as corn oil, peanut oil, soybean oil and so on are liquid at room temperature because they are unsaturated fats: their fatty acids do not have hydrogen bound to them.

Vegetable oil is converted into vegetable shortening by hydrogenating it, forcing hydrogen to bind on to the ends of the fatty acids. This is done by forcing hydrogen to bubble through the oil under pressure, heat, and in the presence of a catalyst.

Compared to vegetable oil, vegetable shortening is solid at room temperature, white in color, and much less prone to rancidity as it is a saturated fat. It has essentially an unlimited shelf life.

It is also very neutral in flavor, so is often used to grease pans. However, any fat will do for that purpose.

In baking, it performs very well in making North American style pie crusts, where it helps promote a flaky crust, but it has little flavor. It also performs very well in deep frying.

As a solid fat, like butter, it can also be creamed with sugar to help leaven baked goods, although it does not give the flavor benefits of butter.

Note that margarine is essentially an emulsion of vegetable shortening (about 80%) and water (about 20%) plus colors and flavorings, meant to imitate butter.

See also:

Are there any substitutes for Shortening?

They don't call it vegetable shortening in India, but "Dalda" is exactly that. As @rumtscho explained, it is made from an industrial process.

"Vegetable shortening" is a type of fat. It is created from vegetable fats in a highly industrialized process, until it is a solid white block. It mimics the baking properties of lard the same way margarine mimics the baking properties of butter.

You may be able to find vegetable shortening under some different name, such as "fat of plant origin", "frying fat" and so on (but not all of the fats with this name will be vegetable shortening). The better way is probably to substitute it. In complicated recipes, it will be important to choose whether to use butter or lard as a substitute. But for greasing a pan, any fat will do, even a liquid vegetable oil. Choose any fat without its own strong flavor, and spread it in a thin even layer on the pan.

Vegetable shortening is commonly known in the U.S. by the brand name Crisco. It's made by saturating the molecules of a liquid oil, commonly vegetable or canola oil, with extra hydrogen, which increases its melting point so that it's a solid at room temperature.

Shortening in the U.S. has generally come to replace other solid fats traditionally used in baking, such as lard (from pork fat) and butter (from milk), primarily because it's cheaper, vegetarian, and doesn't add any taste to the food being cooked with it. However, butter and even lard are making a comeback, as the naturally-saturated fats of these products, while not exactly health food, are turning out to be better for you than the artificially-hydrogenated oils and trans-fats developed to replace them. The Crisco product on the shelf right now is trans-fat free, but is still 99% artificially-hydrogenated fats.

For greasing a pan, almost any food-grade fat will work; shortening is recommended because it melts into a thick oil at baking temperature, which won't burn, evaporate or soak completely into what you're baking. However, all you really need is something to lubricate the pan so your cake will release from the pan. You could use a cooking spray like PAM, or a tasteless oil with a higher "smoke point", like cottonseed. Butter works, but if you're baking a very spongy cake or baking at high temperature, it can soak into the cake and not do its job (tastes great though).