Offloading is a fancy word for deleting the app. The icon for the app remains, and if you need the app at some point in the future, your iPhone will download it from the App Store and install it for you.
Since most apps take up a lot more space than any associated data does, this is a handy way to free up storage space.
Apps that you've not used for 12 days or more are fair game for offloading.
But there is a catch -- if the app is removed from the App Store, then you won't be able to redownload it.
This is definitely worth keeping in mind.