Actually, there are two different types of edited pokemon:
Legal and Illegal.
Legal is when the pokemon is edited, but most of the time it is done to obtain perfect IV's, shininess faster, or even boost it a few levels or so.
Illegal is when the pokemon has moves/abilities it is not supposed to have (i.e. a Charmander with Water Gun, a Bidoof with Judgement, a Spiritomb with Wonder Guard, etc.) Most of the time, you can tell that the pokemon is blatantly badly edited on the GTS.