What is "android:allowBackup"?

For this lint warning, as for all other lint warnings, note that you can get a fuller explanation than just what is in the one line error message; you don't have to search the web for more info.

If you are using lint via Eclipse, either open the lint warnings view, where you can select the lint error and see a longer explanation, or invoke the quick fix (Ctrl-1) on the error line, and one of the suggestions is "Explain this issue", which will also pop up a fuller explanation. If you are not using Eclipse, you can generate an HTML report from lint (lint --html <filename>) which includes full explanations next to the warnings, or you can ask lint to explain a particular issue. For example, the issue related to allowBackup has the id AllowBackup (shown at the end of the error message), so the fuller explanation is:

$ ./lint --show AllowBackup
AllowBackup
-----------
Summary: Ensure that allowBackup is explicitly set in the application's
manifest

Priority: 3 / 10
Severity: Warning
Category: Security

The allowBackup attribute determines if an application's data can be backed up and restored, as documented here.

By default, this flag is set to true. When this flag is set to true, application data can be backed up and restored by the user using adb backup and adb restore.

This may have security consequences for an application. adb backup allows users who have enabled USB debugging to copy application data off of the device. Once backed up, all application data can be read by the user. adb restore allows creation of application data from a source specified by the user. Following a restore, applications should not assume that the data, file permissions, and directory permissions were created by the application itself.

Setting allowBackup="false" opts an application out of both backup and restore.

To fix this warning, decide whether your application should support backup and explicitly set android:allowBackup=(true|false)

Click here for More information

Here is what backup in this sense really means:

Android's backup service allows you to copy your persistent application data to remote "cloud" storage, in order to provide a restore point for the application data and settings. If a user performs a factory reset or converts to a new Android-powered device, the system automatically restores your backup data when the application is re-installed. This way, your users don't need to reproduce their previous data or application settings.

~Taken from http://developer.android.com/guide/topics/data/backup.html

You can register for this backup service as a developer here: https://developer.android.com/google/backup/signup.html

The type of data that can be backed up are files, databases, sharedPreferences, cache, and lib. These are generally stored in your device's /data/data/[com.myapp] directory, which is read-protected and cannot be accessed unless you have root privileges.

UPDATE: You can see this flag listed on BackupManager's api doc: BackupManager