Iron Shirt (鉄布衫 in Chinese) simply put is the ability to take punches. The term has been mystified, and magnified, in various Chinese martial art fictions depicting a legendary martial art skill not only having the ability to take punches but also against sharp weapons (and rumors had it that some Chinese boxers died tragically through holding such belief during the Boxer Revolution against European invasions). As our knowledgeable reader Iv Cho once commented [click here], a body able to take punches is a prerequisite to do free fights in the ring. Modern day professional boxers can easily take a few hundred pounds of punch at his abdomen (please check up this earlier post by my buddy fellow blogger Rick You hit like a girl) . An interesting question: how do tai-chi practitioners in the old days being trained in the art of taking punches?
The science of taking punches at the abdomen is simple. The practitioner's abdomen has to simulate a strong elastic ball. When an elastic ball is being punched, the force will be dissipated evenly as well as partly being absorbed. The method, in the briefest sense, is inhale, focus and receive the punch. Before he is able to simulate his abdomen as such, a practitioner has to work on building his torso and abdomen strong, for the simple fact that a balloon will not be able to take any punches! The practice of tai-chi nei gung is precisely aiming at training one with a strong elastic abdominal ball. The act of conditioning this strong elastic ball with actual punches will evidently be necessary. For example, at the end of 12 Yin styles in 24 styles tai-chi Nei Gung, a practitioner is required to chi-rub his abdomen in circles(fascia conditioning), test-punch his own abdomen and do it again a few round (it is supposed to be done while standing, though doing it lying down seems to be more effective [but less convenient while doing the 24 styles]). Actual punching drills by a training partner will probably be required if one is considering stepping onto the ring for real.
Another interesting fact is that during the earlier editions of UFC, wrestlers shocked their Muay Thai and boxing counter-parts by their willingness, and ability, to take a few punches or kicks, then entered and tackled their stand-up opponents into submission. Wrestlers (in particular those in Greco-Roman wrestling with rules forbidding attacks below waist, as well as forbidding leg tripping, resulting in more spectacular throws) can indeed take much "punishment" on their bodies, oftentimes more so than boxers.
Tai-chi practitioners in the old days understood the logic behind and trained themselves accordingly. For example, according to the biography of Wu-style master Wu TuNan (吳圖南), who was led by his father to train under Wu grandmaster Wu JianQuan (吳鑑泉) when he was a boy because of poor health (the two Wus were not related), he had this break-fall training experience. Master Wu first conditioned young Wu's body through tai-chi stretching (纏絲功/松功), tai-chi nei gung(太極内功) and doing the tai-chi form(太極套路). According to young Wu, the toughest part came later. Master Wu would then do pushing hands (推手) with him, with the singular objective of throwing him on the ground so that his body would fall flat from a height, as determined by his master! In one or two unfortunate incidents, when he was accidentally dropped onto a wooden chair or table breaking it in the process, the pain was so bad that he said he felt rather wishing to die than to continue! Young Wu was trained like a modern day wrestler in taking punishment, or more so actually. Nowadays, some tai-chi schools still keep this tradition of using break-falls to condition a student's body, with tatami and no wooden chairs nor tables around!
PS: The above discussion only applies to punches at the body, and the abdomen in particular. And even then, other important techniques like rolling with the punches have not been discussed.