Kiting is the act of grabbing an enemy's attention, then having said enemy chase him or her for a prolonged period through running around the area it is found in.
As the enemy is in constant motion, it will receive little chance to hit its target (and gain TP in the process), nor will it have much of a window to use special attacks.
Kiting tends to be better accomplished when Gravity is applied to the kited enemy. This slows its movement speed, giving the kiter more room to avoid physical damage.
Uses in Party/Alliance Play
In party situations, this strategy is commonly used in BCNM, ENM, or other boss or NM fights as an alternative for standard (stationary, or "straight-up") tanking, or to occupy a second enemy who is highly resistant to Sleep and Bind while the rest of the party or Alliance is engaged with another enemy.
Ninja (or characters with a Ninja subjob) are typically used in these kiting roles, as the most damage an enemy can do while being kited is physical in nature. This damage tends to be easily absorbed by Utsusemi. Kiting in this configuration is most effective against enemies who deal high damage balanced with high attack delay.
Note that this strategy creates a disadvantage for damage dealers using standard attacks, since the kiter is constantly moving—and thus, so is the enemy. This can be managed by having the kiter lead the enemy across each damage dealer's path, just within their melee range, so at least one melee hit (or Weapon Skill) may be used. (In cases where certain attacks make melee with the enemy a greater risk, each damage dealer may use Ranged Attacks to build TP instead, only making melee contact when their Weapon Skills are ready.)
The issue with kiting with Ninja Subjob while others hit your target is how easily you will lose hate. Generally, when kiting without hate-building tools, you do not want others hitting your target unless it is a manaburn-like situation where the target will be killed quickly and kiting only serves as stalling until the damage is dealt.
Uses in Solo Play
Mages (Particularly Red Mages) are also capable of "solo kiting" higher-level enemies through applying Damage Over Time-type magic to an enemy while Stoneskin, Blink, Phalanx and so on are active to absorb physical damage received. The DOT, when reapplied constantly, eventually causes enough damage to defeat the enemy by attrition—though this method is very time-consuming.