The Basics

Hydrostatic shock or hydraulic shock describes the observation that a penetrating projectile can produce remote wounding and incapacitating effects in living targets through a hydraulic effect in their viscous tissues, as well as local effects in tissue caused by direct impact from the projectile.
A good way to begin understanding the concept is to first understand the terms, Hydro-static-shock.
Hydro- water, liquid 
static- fixed position, stationary, or without motion
shock- the effect of a violent collision or unexpected blow
By collecting these simple definitions we can gather that hydrostatic shock refers most generally to the effect of a collision on a stationary liquid body.

http://www.dailymail.co.uk/news/article-1219762/Guns-roses-The-photographer-literally-shoots-subjects.html