Trimming: cutting away excess fabric in the seam allowance to reduce bulk. Trimming can be done along seams and also at corners. Often times, trimming is used in combination with grading.
What to trim?
1. For acute corners trim more so that when the piece is turned right side out, there will be less bulk.
2. For square corners trim at 45 degree angle about 1/8" away from seam.
3. For obtuse corners, trim less because there will be less bulk when turned out.
The idea is to trim just enough so the the seam allowance will fold back on itself without having extra fabric creating bulk.