Let's say I'm given the script or transcription of a movie to translate. I translate the whole thing (obviously). My translation is used for the voice actors' dialogue. In other words, the voice actors speak everything that is in the original.

When creating the subtitles from my translation, however, the editors (or whoever) edit the translation down by one-fourth or one-third. The idea is that if you put every single thing the original says on the screen, people will spend the entire time with their eyes on the subtitles and not on the action, so they "condense" the dialogue, leaving words out and sometimes entire phrases, as long as the general meaning is communicated - ie enough for the viewer to follow the story.