If you handwash a piece of clothing, you wash it with your hands in a basin or sink, not in a washing machine. Jumpers and silk often say handwash only on the label, because a machine would shrink them or spoil the shape. You can use it as a verb (I handwash the wool) or as a kind of instruction (handwash only). In shops, a handwash can also mean soap for washing your hands — a pump bottle by the sink — but this sense is the clothes-in-the-basin one. The verb feels a little old-fashioned now that most homes have a machine, though actually the label is still everywhere.