यज्ञरूपेणेति शिपिविष्टः; 'यज्ञो वै विष्णुः पशवः शिपिर्यज्ञ एव पशुषु प्रतितिष्ठति' इति श्रुतेः ।शिपयो रश्मयः, तेषु निविष्ट इति वा ।
In plain words
He is Śipiviṣṭa because He has entered in the form of sacrifice. The śruti says it: "Sacrifice is Viṣṇu; the animals are śipi; and it is sacrifice alone that takes its firm stand in the animals." Or take śipi to mean rays of light — then He is the one who has entered the rays.
Close to the Sanskrit
Śipiviṣṭaḥ — thus, by way of the form of sacrifice; because of the śruti: 'Sacrifice indeed is Viṣṇu; the animals are śipi; sacrifice alone stands firm in the animals.' Or: the śipis are the rays; entered into them — thus, alternatively.