A retcon (short for "Retroactive Continuity") is a storytelling tool in which previously-unrevealed past events are revealed. Often, this results in changes that overwrite what was previously known about the situation or character being retconned.
Some LNH characters have the ability to cause retcons, actively changing the past through an effort of will. This power can be dangerous to the fabric of reality, and often carries with it the danger of unfortunate consequences if the way the retcon fits into past continuity is not properly explained. Looniverse-A has one of the lowest RR-values (Retcon Resistance Values) in the multiverse, and other worlds in the Omnilooniverse aren't much more resistant.
As well, Looniversal magic is powered by retcoether, the energy of retcons in its purest state. Retcotheric energy is intimately entwined with the creation of the Looniverse, and flows like a river through the world.
When a story is referred to as being retconned out, it's retroactively declared not a part of the (patchy, threadbare) fabric of LNH continuity.