It just the ratio of; Shock Stroke : Travel.
In Simple terms:
So if you have a bike with 5.75" travel fitted with a 2.875" stroke DHX for instance the ratio is 2:1 because for every inch the shock moves, the rear wheel moves two.
1:1 is perfect in theory because each inch of travel is using less of the capacity of the shock. Tuning differences are far better affected on a lower ratio set-up, because a small change on the shock, means a small change on the travel.
If for instance you changed a setting that effected the mid stroke of a shock, say the middle 1" on the aforementioned 2.875" DHX, then on a bike with 8.625" travel (A ratio of 3:1) would have its mid stroke effected also but because of the ratio of 3:1 the effected travel would be 2.875", meaning the change has been mutliplied. So a small change shock-side of things results in a larger difference in travel, this can make it harder to control settings, when small tweaks can result in huge changes.
So in theory a lower ratio means you can make smaller tweaks, and so make smaller adjustments to the travel, meaning finer tuning.
This also applies to deficiencies, andinaccuracies in the shocks performance / settings., and inaccuracies in the shocks performance / settings. A small deficiency in the shock would result in more of the travel having the ill-effects in a higher ratio set-up.
This is of course all 'In- theory', as many different suspension designs means that the effects of shock stroke are very different anyway.
A ratio of much over 3:1 would result in alot of pressure on a shock, and much higher operating stresses, because the compression force would be so high and it would be very hard to tune successfully.
Wow, having done years of physics / mechanical dynamics, its harder to explain than i thought, so apologies if thats hard to understand. Its late here now.