According to Wikipedia:
Photo manipulation is the application of image editing techniques to photographs in order to create an illusion or deception (in contrast to mere enhancement or correction), through analog or digital means. Its uses, cultural impact, and ethical concerns have made it a subject of interest beyond the technical process and skills involved.
Photoshopping is slang for the digital editing of photos. The term originates from Adobe Photoshop, the image editor most commonly used by professionals for this purpose; however, other programs, such as Paint Shop Pro, Corel Photopaint, Paint.NET, or the GIMP, may be used. Adobe Systems, the publisher of Adobe Photoshop, discourages use of the term “photoshop” as a verb out of concern that it may undermine the company’s trademark. Here we’ll use it anyway with a nod to Adobe’s awesome software applications. (Please, go buy a copy!)
Despite this, photoshop is widely used as a verb, both colloquially and academically, to refer to retouching, compositing, and color correction carried out in the course of graphic design, commercial publishing, and image editing.
In popular culture, the term photoshopping is sometimes associated with montages in the form of visual jokes, such as those published on the fark.com website and in MAD Magazine. Images may be propagated memetically via e-mail as humor or passed as actual news. An example of the latter category is “Helicopter Shark,” which was widely circulated as a so-called “National Geographic Photo of the Year” and was later revealed to be a hoax.