When a concealment cipher is used, every X number of words within a text, is a part of the real message. The message is within another message.
A concealment cipher is a message within a message. If my other super-secret spy buddy and I decide our key value is every third word, then when I get a message from him, I will pick out every third word and write it down. Suppose he sends me a message that reads, “The saying, ‘The time is right’ is not cow language, so is now a dead subject.” Because my key is every third word, I come up with “The right cow is dead.” This again means nothing to me, and I am now turning in my decoder ring.
Concealment ciphers include the plaintext within the ciphertext. It is up to the recipient to know which letters or symbols to exclude from the ciphertext in order to yield the plaintext. Here is an example of a concealment cipher: i2l32i5321k34e1245ch456oc12ol234at567e
Remove all the numbers, and you’ll have i like chocolate. How about this one?
Larry even appears very excited. No one worries.
The first letter from each word reveals the message leave now. Both are easy, indeed, but many people have crafted more ingenious ways of concealing the messages. By the way, this type of cipher doesn’t even need ciphertext, such as that in the above examples.
Consider the invisible drying ink that kids use to send secret messages. In a more extreme example, a man named Histiaeus, during 5th century B.C., shaved the head of a trusted slave, then tattooed the message onto his bald head. When the slave’s hair grew back, Histiaeus sent the slave to the message’s intended recipient, Aristagoros, who shaved the slave’s head and read the message instructing him to revolt.
The following answers are incorrect:
A transposition cipher uses permutations. A substitution cipher replaces bits, characters, or blocks of characters with different bits, characters or blocks. Steganography refers to hiding the very existence of the message.
Source: WALLHOFF, John, CBK#5 Cryptography (CISSP Study Guide), April 2002 (page 1). and also see: http://www.go4expert.com/forums/showthread.php?t=415