This lesson is courtesy of chinaSMACK.com:
“Shanzhai” (山寨) = shan1 zhai4 = literally “mountain stronghold” in reference to historical warlord holdouts that were outside of government control. A “shanzhai” edition product thus refers to products outside of government regulations that are widely reflected in the numerous fake and knockoff electronics/commodities made in China today. The term “shanzhai” can also refer to things that are improvised or home-made and are generally crude in both form and function (the closest English equivalent would be “ghetto”).
In other words: KNOCK OFFS. Like when you buy IVIKE vs NIKE or SQNY vs SONY! Did you know there was a name for them aside from “FAKE?!”
There are a bunch of good examples at chinaSMACK’s post, so check it out!