If many people short-sell a stock, it increases the supply of that stock and reduces the demand (an increase of people wanting to sell it) which drives down prices. Short-selling isn't price manipulation, it's the inverse of buying a stock, which drives up the price.
The same is true of simply selling the stock, except with a short sell there's a guarantee that it will be bought again. Now, a naked short sell can drive a stock's price down, but it's incredibly risky and can easily bankrupt the naked shorter.
