HDPI is High DPI.
Which DPI is Dots Per Inch.
HDPI is about pixel density (pixels per inch). HD2 has high density (217) by default, but some cooks (ROM makers) may lower this number, so the apps will think that our phone is a tablet and e.g. icons will be smaller.
If DPI wasn't set on a fake number, you could take other device, let's say SGS (233), and the icons would be the same size (in centimetres, not pixels)