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Machinimas are videos made on any video game that feature an out of game mission or any other kind of story. In this case, it is "GTA 4 machinimas" that are being discussed.
Machinimas on GTA 4 are very common and there is even a channelthat makes a very large number of them. The videos are mostly made on PC with Video Editor because it allows for great footage, but can be made on the Xbox 360 and PS3, just without awesome camera angles. Most machinimas are made to show gritty, urban action mostly shown in Martin Scorsese, some show mods, funny twists, and just normal gameplay. The most common kinds show bank robberies or other kinds of robberies and end with a funny twist such as in video. Using mods, videos can be made to include story mode characters such as Packie in the aforementioned video as the protagonist and a random pedestrian as the protagonist in "The Bad Assasin". Mods also can set characters to chase other characters, set gangs to appear, or even snow to appear.