Ship = send a package somewhere via the mail service or a private company. Drop Ship = move goods directly from the manufacturer to the retailer bypassing usually distribution channels. So if you buy online from a manufacturer and you need to deliver all of the stuff you've bought to a large number of people, it is possible by the "drop ship service" (it the manufacturer offers it) to avoid this double step and ship directly from the manufacturer to those people.

ship= transport goods commercially Drop ship= The shipping of merchandise from a supplier directly to a retail store's customer, to minimize inventory and administrative costs.

Further to pizzi's answer, dropshipping is used by individuals selling items on the internet (e.g. e-bay). They have an account with a supplier (the dropshipper) and advertise goods but never actually own them or have them in their posession. When you buy something from one of these sellers they then buy from the dropshipper and the goods are sent straight to you.