This is the opposite of register, it releases a nick you own. When you drop a nick you also lose any rooms for which it was listed as the founder. You must identify with the nick's password before you drop it.
Example:
/msg nickserv drop phil
If you have gotten tired of a nick and no longer want it, then drop it. A nick is like an identity in the chat network, it receives memos, gets opped in rooms, and can own rooms. Dropping the nick removes all of that for that nick. Make sure you want to give up your nick before you drop it. Once dropped, anyone can register it.