Parrying (referred to in Japan as "blocking") is a defensive mechanic that is performed immediately or shortly before an attack will hit, negating the damage and giving the defending player frame advantage, allowing them to punish the attack. Meter is also typically gained from using this mechanic.
There are two main ways to implement parrying. The first is to use an appropriate HitOverride based on the guard flags of the opponent's attack, and the other is to use a Helper with defined attack boxes to use as a ReversalDef that cover the "safe" area for the parry. These hitboxes change depending on whether the parry is used to guard against high attacks, or low attacks.
The HitOverride method is the oldest and is the implementation used by Warusaki3, H", GM, and later Elecbyte for Kung Fu Man's Kung Fu Blocking. This checks the command and statetype against the HitDef attributes for the opponent's attack, meaning a particular parry will only protect against attacks that match the criteria.
Helper + ReversalDef
Another popular implementation used by Phantom.of.the.Server, Jmorphman, and Jesuszilla uses a Helper with a defined attack box that covers the area of the parry with a ReversalDef for detection. In this method, any attack that makes contact with the Helper's box will be parried, regardless of the hitflags (unless combined with a trigger that checks the enemy's HitDefAttr). Typically, there are three separate animations each with one attack box. Standing parry covers the head and body boxes, crouching parry covers the leg box (and sometimes the topmost crouching box), and air parry covers the entire jump box.
This method is more lenient, though it can be combined with the HitOverride method to provide a more strict implementation, which is what Street Fighter III: 3rd Strike does.