NAND redirection is an umbrella term for methods used to redirect NAND reads and writes from the actual system storage (in this context called sysNAND) to the SD card (or technically, any other data source). Among other things, this allows for accessing more recent (in some cases fully updated) system versions (installed on the redirection source) while keeping access to full-control exploits (through the old system installed on sysNAND).
The SD filesystem, being a FAT32 partition, can be shrinked and relocated easily. As such, it is easy to make room on the SD card for a full NAND image. By not listing the NAND image partition in the SD card's Master Boot Record (the first 512 bytes of data on the device which is responsible for providing information on the contained filesystems), the NAND image does not interfere with regular SD card access. The actual redirection needs to be done through use of a firmware modification depending on the location of the NAND image on the SD card. Two common approaches for this are known as EmuNAND and RedNAND, albeit these terms are sometimes also used as synonyms for the concept of NAND redirection in general.