Marking an order as "shipped" will give you some errors when there are backordered items in it. There are two ways to resolve those backorder errors:
1. By adding stock through a stock transfer
2. By allocating stock from other orders.
Stock is allocated to an order once it is submitted by your customer or approved by you. Sometimes you may have orders that were placed at an earlier date than others that you need to ship sooner. Reallocating the stock will allow you to get around this.
For example, let's say you have a customer place an order for 100 Ginger Snaps to be delivered in 2 weeks. This consumes all of your available inventory. Then later another customer places an order for 50 in 1 week, which end up showing as backordered because the order was placed later. You'd like to fill both orders, but in order to ship the first one, you will need to move the stock from the order with a later delivery date to the order that will be shipped first. Clicking "Allocate stock to this order" will do just that. You will now be able to ship the order that needs to go out first. The original order for 100 Ginger Snaps will now show as backordered since you have taken stock from there. Eventually you will need to add stock to ship all of your orders, but this will allow you to ship out those orders that are due first.
Note: You can allocate stock from unshipped orders with a delivery date in the past by choosing "Orders with any ship date" from the Allocate stock to backorders from drop-down field.