A clipping mask is a group of layers to which a mask is applied. The layer at the bottom defines the visible boundaries of the group. If, for example you have three layers, layer 1 at the bottom a shape layer in the form of a car, the next layer, layer 2 an image of a landscape and the top layer, layer 3 a text layer. Clipping masks can be arranges so that the photograph and the text only show through the shape outline in the base layer, layer 1.
A good YouTube video showing how to fit an image into a shape layer is by piximperfect.com and is available here.
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