re: What is unmasking?

Government collects data on everyone all the time. If one is possibly involved with terrorism, that data can be looked at by people in intelligence community, but they cannot share that info, or the names of the people they are investigating, unless they are trying to:
A. Get a warrant
B. Assemble a grand jury to bring a formal indictment

Even in those circumstances, the only people with whom they can share this info with is extremely limited.

Unmasking is distributing either the gathered info, or the names of people being surveilled, outside of those authorized to see it.

In this case, Susan Rice took the info gained from spying on Trump and his associates, and shared that info with people outside of the intelligence community so they could forward it to the media and Hillary's campaign.