Humming bird update is an update on how fast and accurate google returns a result a certain search. It focuses on every keyword a user used in searching and return the most accurate search result for it.
Hummingbird is about synonyms but also about context. Google always had synonyms, but with Hummingbird it is also able to judge context - thereby judging the intent of a person carrying out a search, to determine what they are trying to find out.
In SEO, Hummingbird is actually Google's new algorithm. The algorithm is actually related to search results. Whenever the user type something to search and search engine displays the precise results.