A-hem.
A better way to put it might be this: It's a teaching method. It presupposes a student who gives a rat's ass about learning. Such students are not common.
It goes like this: You teach by asking questions. The answers of the questions should be within reach of the student's knowledge and ability to reason. The questions can include mild hints. You're not telling the student the answer, you're helping the student figure it out for himself. So you go in baby steps, nudge him towards the answer, and break the big thing down into bite size pieces that the student is prepared to chew.
The strength of this is that unlike a lecture, it engages the student's mind with the material every step of the way, so the student is much more likely to remember the stuff than if it were just dumped on him in a mass. The student will also, hopefully, understand the material much more fully. You're communicating more than just a list of factoids: You're showing the student how to get there. The weakness is that it can't be done by an apathetic teacher, and it also requires a very high teacher to student ratio: 1:1, ideally. Also it's useless for stuff like learning state capitals: "Okay, so Michigan is a state. Where is it? What kind of capital do you think it might have?" Heh heh.
Here's yet another way to get at the idea: The hardest part of figuring something out is asking the right questions. Somebody who knows a subject well will have a feel for which questions are the right ones, and can direct the beginner to those questions. Training wheels for the mind.
The Socratic method is great for stuff like computer programming, which can't really be taught any other way. "What are we trying to do here? How would you start?", "Why are you doing it that way?", "What do you think that code will do when you compile it?", "What does that expression mean?", "Why are you assigning input to the array index variable?", "Okay, what actually happens when you dereference a pointer? What's it really doing there?", etc.
So let's go back to the rat's ass above: More often than not, the student will stare at you with blank, lifeless eyes and a slack jaw. He will give random, senseless answers. He will pretend that your questions are rhetorical. He will try to wear down your patience until you give up and do all the work for him. He regards the whole thing as a contest: You're trying to force him to think, and he "wins" by not thinking. Students like that are usually untrainable and all you can do is let them fail. This is why I am not a professional educator: Professional eductators have an ethical obligation not to give up on the hopeless cases. God bless 'em; it must be a hellishly frustrating job. They're saints.