It represents a policy defined on an object. Entities within the system like projects, tasks, documents, folders, emails, notes etc. are examples of objects. Object security policy gives a very fine grain control over which role can and cannot do operations as it is specific to an object.
For example, a user who is neither the manager nor a team member needs to participate in a specific project. As this is a unique case, the project manager can grant the View Project privilege to that user for this project.