Digitizing is transforming pre-existing artwork into an embroidery file, which can run on your embroidery machine, by applying stitches to that artwork in your embroidery software. In other words, embroidery digitizing is using software to create a series of commands which tell your embroidery machine how to stitch out a design.
Although this explanation is rather simple, I assure you that there is a lot more to embroidery digitizing than meets the eye. Embroidery digitizing is like painting