What does bundle install --without production do?

As you seen some people using following command(Which you said in your question):

bundle install --without production

--without production is a special flag which we are using.

For more explanation I am taking following example:

group :production do
  gem 'pg', '0.12.2'
end

Now, If I use following command:

bundle install --without production

In above command, the --without production option prevents the local installation of any production gem means whatever gems are in the production group will not be installed -- which in our example is just one gem: pg.

If you have a group inside your Gemfile like

group :production do
    gem 'whatever'
end

Then when you run your bundle command on your development machine, it won't install the gems intended for use in your production environment. Basically only installing the gems you need in development on your development machine.