It is a process of merging/combining different elements like CG images, clips, matt painting, plates (original or raw green screen footages of life action) and special effects together creatively.
And create an illusion that all these elements are part of the same seamless scene.
In both 2D and 3D Animation studio's pipeline, compositing falls at the Production level and mostly at the end/ bottom of the production process. Compositing artistes are known as Compositors. A Compositor needs to have a thorough understanding and relevant artistic judgment for colors, light and shadows and composition/ staging.
They need to be technically sound, have a know how of current software skills prevailing in market for Compositing. Be able to analyze and solve problems, ability to work under pressure when required, good communication skills and teamwork, ability to address constructive feedbacks and also deliver works on schedule.
The final look and feel or style of the animation is very important. It is the Compositor's job to ensure that the established style of the project is respected and continuity is maintained throughout.