I hear that question often and no they have absolutely nothing to do with Madras shirts.
A “bleed” in printing terms means that color or some graphic element runs all the way to the very edge of the sheet. In order to accomplish a “bleed” we need to trim away excess paper so that only the printed image is showing. For example, a standard letterhead is 8.5″ x 11″. if you design a letterhead that has a colored bar that runs to the edge of the sheet at the bottom and sides we need to print it on a larger sheet size and then trim it to the finished size. The reason for that is that printing presses and digital printers have “void areas”, (areas that cannot be printed) much like your office copier.
Another way to illustrate that is with wood working. My son is a logger, when he cuts a log for 8 foot lumber he knows that the log better be at least 8’6″ because in order to get a stack of even 8′ boards back from the mill he needs to give them extra space to saw. Same thing goes for printing.
Most commercial printers, including Munro Graphics Commercial Printers, have standards that we require for bleeds. By following those standards we can give you the very best possible print job.
If your design involves bleeds or any other special effect it’s always good to check with your printer first as to how to set up your files. If you have any questions at all about file preparation including bleeds please send me an email at firstname.lastname@example.org
I stumbled across this really great tutorial recently. The author explained the topic much better than I can. Check it out http://www.blog.spoongraphics.co.uk/tutorials/designing-for-print-setting-up-crops-and-bleed