POD (Print on Demand) is done on a digital printing press.  There are several brands who make these machines--Docutech is one; Heidelberg is another.  These printers are able to print out a book in a ridiculously short period of time (a few minutes), print a cover, bind it and voila, it's ready to go to the shipping department.  Print on demand books are printed one at a time.  They can also be printed in quantities, but these are usually under 500.

This is a far cry from traditional offset printing in which plates would have to be made of each page and then printed in large enough quantities to offset the price of the setup.  Unlike offset printing, the POD setup is inexpensive, but the individual cost per book is more costly than offset.  The way it works out, it's generally cheaper to print on an offset press if you're going to print at least 2000 - 3000 or more copies. If you're going to print fewer copies, it's cheaper to do the books on a digital press. 

POD is exactly what it says: Print on Demand.  This means that books are printed when someone orders them, and they aren't printed unless someone orders them.  They aren't stocked (except in tiny quantities) in distributor warehouses.  And when bookstores look them up on their databases they often find that they have to be "backordered."

This doesn't mean that no bookstore ever stocks POD books, however.  On the contrary, if the book is good and the author is personable, bookstores will often take a chance on local authors.  And if the author, or the author's publisher is smart, then they'll figure out a way to parlay that small entry into something larger.

A couple years ago Ingram said they  going to address the "backordering" issue by providing an option to create a "print order" instead.  This was supposed to make it easier for bookstores to know how to order these books. Unfortunately, this did not happen. Now Ingram has another plan, which POD publishers and authors are waiting on with bated breath. If it does happen, it will make distribution through Ingram a real benefit.

In the meantime, it's important for you to know how booksellers can order through Ingram or through your publisher.  If you have this information, you'll be able to educate the booksellers you contact, and this will make it easier for you to get them to carry your book.