Slippage in trading occurs when you are placing market orders. The difference between the BEST Price and the actually executed price is slippage. For example you want to buy 100 shares and the best ask rate available are (50 shares @ 800 and the next 50 @ 800.50 = Average 800.25). But when you place a market order and the price happen to change then you might not get the BEST price of 800.25. So lets say the order is executed at 800.75, hence the slippage here is 0.50 paise.
Slippage is inevitable in market orders hence the only way you can completely avoid is by placing limit orders.Slippage will be high in volatile scripts and illiquid scripts.
However if you are trading in high volumes and use market order only then you can try i3 software which has various orders types which will help reduce slippage. Ref - http://zerodha.com/z-connect/charting-coding-and-backtesting/zerodha-i3/zerodha-i3-execution-based-algorithms