A short block is an engine sub-assembly comprising the portion of the cylinder block below the head gasket but above the oil pan. An in-block cam engine includes the camshaft, timing gear, and any balance shafts. Overhead cam engines don't include those parts.
Mechanics purchase a shortblock as a quicker way to rebuild an engine—avoiding the work and time of rebuilding and assembling the shortblock components. Companies that provide short blocks may also offer performance improving engine work. Machine shop work can increase performance by boring out the engine to increase cylinder diameter (which increases internal volume), balancing rotating assemblies (such as the crankshaft), installing a higher performance camshaft, etc. Bored-out engines require larger pistons and new piston rings. This kind of work can be done by amateurs ("shade tree mechanics") or by professional machine shops and engine rebuilders.
A short block is considered destroyed when it either warps or cracks, often due to overheating.