It is an intense kind of daydreaming that you use to increase your ability to draw to you the things you want in your life. You immerse yourself in the daydream and imagine what you want to happen in your life with as much detail as you can. The more positive emotion you can generate the more success you'll have at retraining your mind to believe that you can have what you want. While visualizing these things you imagine yourself as being in a flow of universal energy, so...you're controlling part of it in your mind but you're also allowing something larger than yourself into the picture. That's where the "flow" part comes from.
I just have been listening to the Flowdreaming podcasts on iTunes the last couple of days. Was surprised to see your question. I'll take it as a sign that I'm getting into the flow! The podcasts are very helpful.