Kilmuir:
'chunking' is effectively working multiples/ breaking numbers down to their constituent parts (hundreds/ tends/ units) and in practice means a child can work with numbers they know.
For example, in the problem 15 x 45 knowing that that multiplication problem can also be thought of as
10 x 45 = 450
and
5 x 45 = 225 (you may need to work that out or you can use knowledge that 5 is 1/2 of 10 - so 5 x 45 is 1/2 of 10 x 45).
then adding these two sums together:
450 + 225 = 675
(again possible using chunking - so adding hundreds - 400 + 200 = 600/ adding tens 50 + 20 = 70 and adding units - 0 + 5 = 5 and then adding 3 together - 600 + 70 + 5 = 675).
I suppose the easiest way to think about it is with someone new to multiplication/ division beyond multiplication tables (x0 - x12) - they may need to work with mutliplication facts that know when mutliplying by x15, x36, x99, etc.....
I think there's a tendency in schools to insist that pupils only use chunking until KS2 Upper - which probably isn't helpful (especially for more advanced students) - but the point is a pupil has to actually demonstrate they get this step. In essence when doing old fashioned vertical multiplication/ long division (sometimes called bus stop method) we do actually go through these steps but we have little tricks - like moving over one column to the left when multiplying by the next digit (e.g. if mutliplying by x14 first working x4 and placing answer below each number and then working x1 (but placing a 0 in the units column to 'hold that place' or sometimes not even bothering with the 0 but moving x1 answers over a column (recognising you're now multiplying by x10).
There's a really useful game involving chunking on BBC Bitesize which will give your DC some useful practice on these concepts for multiplication/ division: www.bbc.co.uk/bitesize/ks2/maths/number/multiplication_division/play/
I think for those of us very comfortable with long multiplication/ division - chunking seems a very long winded process with so many steps (both multiplication/ division and then adding everything up) that it seems more likely (and indeed in the case of DD1 definitely WAS more likely) errors would be made along the way.
To be honest - most children at DD1s primary were using old fashioned long multiplication/ division methods but 'played the game' with chunking to keep the teacher happy.
HTH