Drop 2 means to drop the 2nd-top note of a chord down an octave. For example, say you have a Cmaj7 chord whose notes are stacked as C – E – G – B from the bottom to the top, as you see at the top-left of the image. The 2nd-top note of the chord is G in this voicing. Now, you can move this note downwards so it’ll be placed an octave lower. This will increase the range of chord and make it sound wider. The resulting chord will have its notes stacked as G – C – E – B.

The original voicing, which we may call a closed voicing, has the four notes close to each other. The intervals between the notes in the closed voicing are a 3rd, whereas Drop 2 contains wider intervals such as a 4th and a 5th.

Likewise, Drop 3 means to drop the 3rd-top note of a chord down an octave. If your original chord voicing is C – E – G – B, the E will be dropped and and the Drop 3 voicing will look like E – C – G – B. This is even wider than the Drop 2. The interval between the E and C is a 6th, and there’s also an interval of a 5th between the C and G.