"Best in show" is the title that is given to a winning animal in an animal show/competition, such as a dog show, cat show, or horse show. There can be more than one "best in show" at any one show, because each show has multiple categories. The categories are usually differentiated by breed of animal, and each category will have one "best in show." It describes the very best example of a particular category or classification.
Thurston: "My beagle just won best in show today!!"
Lovie: "Congratulations! My Shih Tsu came in best in show today too! I wonder if Mary-Ann's poodle was best in show, or if she lost to Ginger's bitch."