This achievement is obtained by using shears on a sheep. This must be done in survival. This can be completed on any difficulty.
Shears are created with two iron ingots. Iron ingots are created by smelting iron ore in a furnace. Iron ore is found when mining, and looks like stone with brown bits in it.
Now you have shears, go and find a sheep. They can spawn anywhere there is grass, and are extremely common. They seem to have a higher spawn rate in plains biomes, at least they are easier to spot there.
Once you have found a sheep go up to it and press
if using a controller, or right click if using a mouse. This will shear the sheep and your achievement should unlock.