Offset is the distance that the forward side of the neck/hosel of the clubhead is set in front of the bottom of the face of the clubhead. With offset, the clubface arrives at impact a split second later than with a clubhead that has no offset or in which the face is in front of the neck/hosel of the clubhead, which is the case with woodheads.
This additional time before the face meets the ball allows the golfer to continue rotating his hands around, thus allowing the clubface a little more time to rotate around into a more square or less open position at impact.
There are two reasons that offset is more effective in woods than in irons for helping a slice. One, woods have less loft than irons, which means the slice from an open face at impact is greater. Two, the difference between a typical woodhead - in which the face is in front of the neck/hosel - compared to an offset wood is greater than the difference between a non-offset iron and an offset iron.
This greater difference between conventional and offset woods allows for more time for the golfer to rotate the face around to be less open at impact than is possible between a non-offset and an offset iron.