Tethered means being basically "attached" to your computer in a way; you must boot your device by running code on it (via the dock connector) to make use of an exploit.
Description
Devices are tethered because there is one or more area where the device fails one or more signature check along the way due to the jailbreak. The device is able to boot up because there is a way to execute code via USB that allows you to bootstrap to a pwned (no signature check) iBSS, iBEC, or iBoot to finish the boot process.
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