This phrase refers to the lawful authority to enter a road or change lanes. When a person has the right of way, they have legal permission to make their move. By necessity, other vehicles must stop. If they don’t, then an accident can occur.
Right of way laws come to matter in many accidents because some driver or pedestrian did not stop when they were supposed to. When a motorist refuses to stop, they can be held legally liable for the accident.
Some people wrongly assume that if Car A strikes Car B, then Car A is always at fault. In reality, we need to look at who had the right of way. It might be that Car B had the legal authority to move, though they were the one hit.