What does the variable mean in this function? [Solved]

MouseClick is an event that fires when a player clicks on the parent Part of the ClickDetector. It provides the player that clicked it as a parameter.

In form it would look like this:

local clickDetector = script.Parent

--Include the parameter
function onClicked(PlayerThatClicked)
    print(PlayerThatClicked.Name) --print's name of the player that clicked it.
end

--Connects to the function. Same as your code too
clickDetector.MouseClick:Connect(onClicked)

Not all events have a parameter that do the same thing. You could check by using the API reference in RobloxDev site.

All parameters, like a variable, can use any name inside the parenthesis.

Arguments and Parameter article