Copy-editing is the process when an editor makes formatting changes to text. Copy, in this case a noun, refers to matter (such as handwritten or typewritten pages) to be set (as in typesetting) for printing.
Copy-editing typically entails fixing spelling and punctuation mistakes and correcting grammatical, semantic, and other similar errors, as well as adding standardized headers, footers, and headlines, and so on—all elements that must be addressed before the typesetter can prepare a final proof copy. Traditionally, a copy-editor reads printed or written text, such as a manuscript, and marks it with handwritten proofreader's marks for correction. A modern alternative is to read the text on a computer display in wysiwyg form and enter the corrections directly into the computer.
An important function of the copy-editor is to ensure that the text is not only grammatically correct and spelled correctly, but also makes sense and is clearly written for its intended readership. In many cases the copy-editor may be the only person other than the author to read the entire text before publication. The copy-editor helps the author say what he/she meant to say but didn't quite express properly!
See also: proofreading