Heel-toe drop is essentially a measurement for how fat a running shoe’s heel feels. It's often shortened to just "drop," "offset," or sometimes called a "ramp angle."
Whatever you call it, it just tells you how much taller the heel is than the forefoot. It's simple math: A shoe with a 25-mm thick heel and a 15-mm thick forefoot will have a 10-mm heel-toe drop. A shoe with a 10-mm-thick forefoot and a 10-mm-thick heel would have a 0-mm heel drop (aka "zero drop").
Here’s why it matters. A shoe with a thick heel is designed for someone that runs landing heels-first —it puts a wedge of foam beneath your heel which has to hit the ground first.

A shoe that’s flatter allows you to run on your midfoot—so your entire foot hits the ground at the same moment as your heel.

Not long after the minimalist trend began in about 2009, companies began using heel drop as a primary (sometimes the primary) way of categorizing their shoes. Now, if you know you like 4-mm drop shoes, it’s considerably easier to shop than it was five or six years ago.
    
Here’s a quick reference guide for what to expect from shoes various heel-drops.

0-3MM: A flat shoe. Midfoot or forefoot strikers only. This is the geometry at which your foot is in the 'most natural' position when you hit the ground, but the feeling is extremely flat for most runners until your body adjusts to it. In footwear, this is considered a little tougher on your achilies, calf, hamstrings and glutes.  

4-8MM:
This will feel very flat to most runners, and caters heavily to midfoot strikers. The heel is completely out of the way, with only the slightest hint of padding to forgive accidental heel strikes. 

9-12MM: This is a compromise zone—A moderate heel-striking shoe. Light heel strikers should enjoy running in these shoes, and it’s a good place to start if you’re trying to develop a more natural gait.  You will notice the heel and it is possible to midfoot strike, but you may feel like the shoe’s heel is getting in your way.

12+MM: Heel Striking only. These shoes are designed for runners who run heavier on their heels. Quite often these shoes have the most noticeable cushion and are a 'conventional' type of running shoe 

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