Bitcode refers to to the type of code: "LLVM Bitcode" that is sent to iTunes Connect. This allows Apple to use certain calculations to re-optimize apps further (e.g: possibly downsize executable sizes). If Apple needs to alter your executable then they can do this without a new build being uploaded.
This differs from: Slicing which is the process of Apple optimizing your app for a user's device based on the device's resolution and architecture. Slicing does not require Bitcode. (Ex: only including @2x images on a 5s)
App Thinning is the combination of slicing, bitcode, and on-demand resources
Bitcode is an intermediate representation of a compiled program. Apps you upload to iTunes Connect that contain bitcode will be compiled and linked on the App Store. Including bitcode will allow Apple to re-optimize your app binary in the future without the need to submit a new version of your app to the store.