What does derating mean?
Can some please explain "What exactly is Derating?"


Operating the part at lower values than rated specifications


  How it is related to positive and negative temperature coefficient.


Running a part at a lower voltage or current means less heat is generated. Powering a 16v max capacitor, at 16v, is stressing it. Running a 20mA led at 20mA will only provide x number of hours of life, while running it at 10mA will provide y hours, where y is greatly larger than x.


  Derating is limited to only resistors and capacitors or it applies to ASICs also.


Derating can apply to almost anything. Resistors, LEDs, Other Diodes, Capacitors, ICs, CPUs. Another common word for derating, in the context of computers and CPUs, is underclocking. As opposed to overclocking, where you run a cpu at a higher than rated speed, underclocking (aka derating) runs it at a lower speed, allowing for less heat and longer life. Mainly used when modders want to remove noisy fans.

As a note, some devices demand derating in certain situations. Resistors listed as x wattage, expect the resistor to be in free air at ambient temperatures with air movement over it. If you put it in a sealed case, or in heat shrink, or in a hot environment, you NEED to derate it down. Same with Solar Panels. The given rating is for IDEAL sunlight. Average sunlight will derate the output current and voltage.