'Milling' refers to putting cards from the library into the graveyard, the aim of a mill deck is to attack another player's library and ultimately force a player to run out of cards so they are unable to draw and lose the match.

Mind Sculpt is an example of a sorcery that forces a player to mill cards.

Milling also allows a player to exploit a large number of cards entering the grave yard, Undead Alchemist is an example of this as its effect causes creatures to be exiled and token zombies to be created.

Milling is not to be confused with Discarding which refers to a player putting cards from their hand into the graveyard, however discarding compliments milling as it leaves an opponent with fewer options to counter the milling strategy.

I've probably missed some of the finer nuances of Milling but this is it in a nut shell, people don't like it because it can be very frustrating to see all your best cards going into the graveyard.