How Trimming works
To be concise, the way that editing works with Media Composer (and other nonlinear editing applications) is that rather than make permanently destructive changes to the actual picture and audio files (the media), it instead makes changes to the references to the media. However, let me give you some detail.
Let's start at the beginning. A clip (for example, Master Clip) in your bin is not actually the picture and/or audio file. It's just a reference to it. The classic analogy (most likely given to me by Greg Staten many years ago) is this:
In a time before computers, libraries used a card catalog to help you locate books. These were filing cabinets which held small, paper index cards.
The cards contained helpful information about a book such as the author, publication date, number of pages, a short synopsis, and so on. It also contained the all-important Dewey Decimal System number that was assigned to that book, so you could locate it in the expansive library. Obviously, that small card was not the book. Its purpose was to point you to the book. Well, that's similar to how clips and media work together too. A clip is a small collection of information that points to (in Avid terminology, links to) the media:
Now let's turn to Sequences. A sequence is really just a collection of references. Each shot (known in Avid terminology as a Segment) is a reference that tells Media Composer what image to show and/or what audio to play from a media file when you press play.
My analogy is this: the media are like books and the Segments in the Sequence are like reading assignments for Media Composer. The reading assignment of each Segment can be lengthened or shortened (trimmed) with no affect on the actual book (the media).