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Cannibalization has many definitions, but one of the simplest is to define it as taking serviceable parts from a thing that does not work to use them on another thing that does not work to make one thing that does work. The term probably came into popular use during WW2 when clever, mechanically adept GI's used their skills to keep equipment damaged in battle running. The somewhat grisly origin of the term probably comes from the fact that when a cannibal eats another human being, he may be said to be using serviceable parts from one person to keep another person (himself) running. The process only works on things that have interchangeable parts.
For a simple example, let's say you have two cars of the same model and year, but neither runs, but each for a different reason. One car may have a bad alternator and a good starter, while the other car has a bad starter but a good alternator. By taking the good part from either car and replacing the bad part in the other car, you can get one of the two cars running. You have "cannibalized" one car to make the other one work. You can extend this concept further by, say, taking the good tires from the cannibalized car and replacing the worn tires on the car that now starts. The process can be repeated almost indefinitely until you have run out of good parts to replace bad ones.
Another meaning is the process of eating one's own kind.
For other excellent examples and definitions of cannibalization, see related links.
