What does open-jaw mean?
An open-jaw ticket is a return flight where you arrive at one airport and depart from another. Think of the outbound and return legs as the two halves of an open mouth, with a gap in the middle that you cover by other means.
Where do you meet it on the trip?
You meet it when a route runs in one direction. A trip that goes from Kunming through Dali and Lijiang, or from Shanghai down to Guilin, does not need to come back to where it began. With an open-jaw ticket you skip the backtrack.
The catch is the gap. You still need to get from the last city to the departure airport, and that leg is separate from your ticket. Rail, a short domestic flight, or a transfer inside a package can fill it. Plan most of a day for a long leg, and check the airport name in the booking, since big cities can have more than one.
One practical tip
Book the ground leg before you settle the dates of the return flight. Then check three things: the baggage rules on the domestic flight if you take one, the arrival time at the departure city, and a buffer night before the flight home. A tight connection is the usual way an open-jaw plan goes wrong.
Related terms
Read land-only package for how this fits with a package, free and easy for self-built routes, and the guide on open-jaw flights to China for examples.