From AMS Glossary
In general, the transformation of data from a "raw" form to some usable form.
In meteorology, this often refers to the conversion of the observed value of an element to the value that it theoretically would have at some selected or standard level, usually mean sea level. The most common reduction in weather observing is that of station pressure to sea level pressure. Temperature is sometimes reduced to a sea level value, mostly in climatological work. Most calculations of this sort are based upon approximate actual atmospheric conditions or on the standard atmosphere.