Modulation is a process in which a signal (usually with the information) is added to a carrier signal. For instance, in AM radio, you have a carrier at some frequncy. You take your modulating signal use that to alter the amplitude of the carrier.
In another post I mentioned modulating the light output of a pair of LEDs such that they could be distinguished when their light was received by a detector. Let me provide a brief explanation of how that might work (which is exactly how I have done this in the past).
Basically, an LED has some finite time that it takes to switch on and off. The blue LEDs I used seemed to work to about 100MHz. However, the led is only linear in some part of that range. So I bias the LED with a DC supply that is just at the lower end of the linearity of the LED. Atop that DC signal I add a modulating signal of lets say 10kHz. Now the LED is effectively going bright/dim at 10kHz. I could use a receiver to obtain this light signal and filter out the DC, leaving only the 10kHz signal.