Your book is finished and delivered. Fantastic. But the publisher isn’t just going to publish what you wrote. Oh no. They're going to mess about with the words and possibly with the structure. I know, I know, you followed Alice’s advice to say what you mean and mean what you say… But that isn't necessarily what the publisher thinks you should say. This isn't necessarily a bad thing – the role of an editor is to improve your book. Of course, you think your book is great already, but almost any book can be improved by a good editor. Similarly, almost any book can be destroyed by a bad editor.
The editor is your first critical reader and tries to stand in for all your future readers. There are generally two broad stages to editing. When you first submit your MS (manuscript) the editor will read it looking for changes you need to make (there may be none at all, but this is relatively rare). The editor will tell you what to do and expect you to do it (we'll come back to this). You'll submit your revised version of the book. Then the second stage. The editor, or a copy editor, will go through the book making small changes - copy editing. The rest of this post is about stage one; copy-editing comes later.
If your book is fiction, the editor might ask for changes to the plot, the characters, the structure, or for an additional (or removed) subplot, more or fewer words, a different voice, etc. If it's a non-fiction book, the editor might say the material needs to be restructured, that something needs to be added or taken out, that the argument is not logical, or strong enough... or countless other things. Either way, fiction or non-fiction, you may have to rewrite or add either small sections or whole swathes of your text. There's a huge difference here between a commissioned book (the publisher approached you) and an author-generated book. If the text was commissioned to fit into a particular series or for a particular market, the editor will have a fixed idea of what it should be like. You will have less room to manoeuvre because your work really must sit comfortably alongside the others in the list, series or anthology.
If the editor has any large-scale issues to be addressed (plot, characterisation, themes, length, structure, line of argument) (s)he will probably ask you to revise the book accordingly. Ignore your instant response to the suggestions. Leave it a few days until your righteous indignation has lost its edge. Look calmly at the suggestions. Are they sensible? Will they improve the book? Are they feasible? Will you want your name on the cover if you make these changes? Once you have decided, talk to the editor. I prefer to use email as there is a record and it gives me a chance to explain arguments at length and cogently, rather than ranting incoherently on the phone, which is rarely useful. Say which things you agree with as well as which things you think are arrant stupidity (probably phrased more diplomatically than that).
Don't assume that you absolutely have to do as the editor says, but you can't just refuse to do it either (at least, not if you want them to publish the book). Give reasons for your own views. In order not to come across as a prima donna author (or just plain lazy) you must be able to defend your point of view in terms of the structure/aesthetics/marketing of the book. Don't just say ‘that’s how I see that character’. Why do you see the character like that? How is that vital to the book? If the editor saw the character differently, how did your writing suggest that different view? Is the editor's idea (God forbid) better? Soemtimes it is. If the editor thinks your argument/plot should be structured differently, make sure you understand why. The editor will not mind if you ask questions and it won't make you look stupid. It's much better to be clear about what you are doing and why than to spend time rewriting it and then have to rewrite it yet again.
You may also be asked to make changes to the writing style at this point. Perhaps the editor doesn't think it appropriate to the age group or target audience, or perhaps you're just not very good at writing English prose (in which case, the editor should not have bought the book, but if the idea/story was good enough they might have done so anyway).
You may end up with a set of changes you have agreed to make, and a set the editor has agreed to forego. If you want to make the changes (rather than tear up the contract), make sure you do it properly. Don't resubmit something that is very slightly different but does not really address the issues. Any but the most useless editor will notice and you'll have annoyed them, led them to think you're stupid, or incompetent, or both, and wasted some of the precious time in the publication schedule.
You won't necessarily be happier with the second version of the book. Dealing with the disappointment that the publisher doesn't want to publish exactly the book you want to write goes with the job, I'm afraid. The book you want to write appeals uniquely to you - the publisher wants to produce a book with more general appeal (a sale of one is not a good commercial prospect). If you are really committed to writing only what you want, regardless of whether it will sell, you should stick to self-publishing.
Coming next… More dealings with the editor: copy-editing