'Show, Don't Tell' is truly golden.
It's one of the most useful directions for evaluating your own writing out there. Making certain your story is alive with strong, active, in-the-moment plot motion and character activity is part of what makes really good writing when that writing is storytelling. Why tell when showing will be more alive and engaging? Showing brings the reader into the moment and makes them forget they are anywhere else but in the story because multiple senses are engaged or called upon at once, and the mind is too busy processing all the elements of the story to have attention for where you and your butt are sitting at that moment. It's part of what allows the Escape.
But 'Don't Tell' is not a rule.
What it is – it's the current trend in fiction writing. It has been taken to it's extreme to become 'show, never-ever tell.' Telling has become a dirty word. When you see rules like that, which say one thing is always right and the opposite always wrong, that's a good time to Beware.
If you stop for a moment and look at writing beyond the moment, you see telling everywhere.
Through-out the history of fiction and storytelling, telling is a time honored and much loved element. It is one of many great tools in the writer's tool-belt. Sometimes it's done through the voice of a narrator, sometime it's the direct mouthpiece of the author, and sometimes it's just a neutral part of the story – an artifact of storytelling we all know and understand, because we all know we are readers being told a story in writing as we read it. Currently the trend is to excise the author from the story entirely, as if the story magically has a life all its own and was not labored into life by a human being for your pleasure/edification. In the past, the author took pride in bringing you their story, and they weren't afraid to be seen.
Homer, Shakespeare, Jane Austen, Charles DIckens, the Brontë sisters, to name just a very few – who's writing is considered top-notch, and who themselves are honored as great writers – tell. They tell you things directly in their stories. And we love them for it. Even today, novels become best sellers full of wonderful telling (like William Goldman's The Princess Bride with its delightful narrator guiding us through the story with a witty, firm hand; like the Lemony Snicket's A Series of Unfortunate Events series of books where the author's identity is effectively replaced with the narrator and the Mr. Snicket's character gets many of the best, most quotable lines). Telling is golden, too.
Telling is strong in that it is direct. The writer can reach right over to the reader and say what needs to be said in a few words and move the story along like a swift moving current, sweeping the reader off into the heart of the story. The pace of a story is about the satisfactory balance between ebb and flow. It needs to dwell and linger, and then it needs to move on. Telling helps the story move on. "What with one thing and another, five years past,' says the Dad reading S. Morgenstern's 'The Princess Bride' to his son in Goldman's The Princess Bride. Brilliant. Nine words and we're off to the rest of the story, no dinking around, no wasted energy. It's why the collary of 'show, don't tell' in Hollywood, which is that screenplays should never have a voice-over narrator, is just about as bogus, when you count how many movies and mini-series are made with voice-over narration. It's used because it works. And works well.
Some recent examples would be the opening of The Fellowship of the Ring, Zombieland, The Men Who Stare at Goats, the Underworld movies, The Rum Diaries, again just to name a few of the many, many.
So, yes, use 'Show, Don't Tell' as an editing tool to identify what needs to be shown, and to weed out those placeholders where you 'told' a part of the story in the draft and now are ready to really get in there and make it come alive. And then, go look at where telling is appropriate and make the most of that tool as well, as it fits the tone and genre of your story.