It means exactly what the text says. Tables are places where lists of IPs are held, like Aliases. On some systems people use these to hold a lot of data, such as lists of IPs/netblocks in certain countries, so they need to increase this size. Most people do not need to change that.
Those default values are determined based on the amount of RAM available in the system. More RAM means a larger default. The default is meant to be reasonable for most people, but obviously in many cases would need to be increased. (The default in 1.2.x was a measly 10,000 :-). You can set that as high as you can handle in terms of RAM; 1 state == 1k of RAM, so 1 million states is 1GB of RAM.