what does the word inside the function brackets mean?

It is a parameter and there can be multiple of them seperated by a "," (Comma). It acts like a variable and can hold a value. When calling the function, you can send in an argument for the parameter.

local function SayThis(WhatToSay) -- WhatToSay would have a value of Hello because it was passed through the function
    print(WhatToSay) -- Because WhatToSay has a value of Hello, it would print Hello
end

SayThis("Hello") -- Hello is the argument you want pass to the parameter

The parameter can also stay unused so when calling the function, you dont always have to pass in arguments. In this case, the parameter won't have a value and would be nil.

local function SayThis(WhatToSay) -- No argument was passed so it would have no value (nil)
    print(WhatToSay) -- Because WhatToSay has no value, it would print nil
end

SayThis() -- No argument passed to the function

You can use multiple parameters.

local function SayThis(First, Second, Third) -- The parameters now hold the value of the arguments in their order. 
    print(First)  -- "Hello"
    print(Second) -- "Bye"
    print(Third) -- We only sent in 2 arguments so the third parameter has no value
end

SayThis("Hello", "Bye") -- You can send in multiple arguments

Sometimes, there are default arguments already sent to the function when it is fired like during an event.

script.Parent.Touched:Connect(function(partparameter) -- Each event have different types of arguments for the parameters. When the script.Parent is touched, the function is called and the part that touched the script.Parent is sent through the function as an argument.
    print(partParameter.Name) -- Would print the name of the object that touched script.Parent. If a tree touched script.Parent, then this would print "tree"
end)