It is talking about a person who isn’t present. It's not necessarily about spreading malicious rumors or embarrassing stories, just sharing information.

Gossip doesn’t only teach us about the person who’s the subject of the conversation, but also about the gossiper. When you gossip you tell others things about your attitudes, beliefs, and ways of dealing with people by seeing who and what you gossip about.

Some gossiping has negative consequences for the target or the gossiper, such as if the target finds out, or if listeners conclude that the gossiper is an untrustworthy busybody who can't mind his or her own business.