No, precuts are not preshrunk. Manufacturers recommend that you NOT wash them before using. I've never heard of steaming fabric so I don't know about that one. Diecut means that the shapes are cut with a metal die - like a shaped stamper with sharp edges. Supposed to make for better accuracy. Buy from the best manufacturer you can afford. I only buy pre-cuts from well known lines. Moda is my favorite. I have found some distortion in all the jelly rolls and layer cakes I have purchased. I have also learned the hard way how to treat the jelly roll strips. I was working on a Gemini quilt from jelly rolls and found that I was distorting them as I starched them and pressed them. So now I just dry iron them before I use them. Lesson learned.