They're referring to all grain brewing. In over simplified terms, the efficiency tells you how efficiently the mash converted the starch in the grain to sugar. There are different efficiency measurements, such as brewhouse efficiency, which takes a few other things into account.
It's largely equipment related. The finer grains are crushed, the more likely your efficiency will be higher, stirring the mash thoroughly can help raise efficiency, etc. Temperature can have an impact if the mash falls outside of the conversion range, or if the rest wasn't long enough for complete conversion on a lower temperature mash.
In short, higher efficiency means you get higher original gravity given an identical grain bill.
I hope that helps explain a little. There's definitely more to it, but hopefully this gives you a basic understanding.
