Chip shots are typically played with the ball back in the golfer's stance, and using a wedge - although a golfer can chip with any club, and many golfers hit chip shots using 7- or 8-irons.
Chip shots differ from pitch shots in that pitch shots are meant to have a higher trajectory that results in a shot landing closer to the pin and rolling just a bit. Pitch shots are typically played from farther off the green than chip shots; with pitches, the ball is in the air more than it rolls on the ground, and with chips the ball typically rolls on the ground more than it is in the air.
What is the technique for playing chip shots? See articles "Learn the 6-8-10 method for chipping"; "Favor chipping over pitching when possible"; and "Shorten backswing, accelerate to improve chipping."
We also have two great instructional video clips that demonstrate chipping technique:
Video: Hitting a chip shot from a good lie
Video: Hitting a chip shot from rough or thicker lies
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