A term used among horse-dealers, for burning the mark into a horse’s tooth, after he has lost it by age; by bishoping, a horse is made to appear younger than he is. It is a common saying of milk that is burnt too, that the bishop has set his foot in it. Formerly, when a bishop passed through a village, all the inhabitants ran out of their houses to solicit his blessing, even leaving their milk, &c. on the fire, to take its chance: which, went burnt to, was said to be bishoped.
Definition taken from The 1811 Dictionary of the Vulgar Tongue, originally by Francis Grose.
Bishop * To Bishop the BallsNathan Bailey's 1736 Dictionary of canting and thieving slang
John S. Farmer's collection of canting songs and slang rhymes