It means exactly what it sounds like--if your cuts are consistently and obviously misaligned by 1/16" or whatever in the same direction during normal usage. In other words, if your cutter is not cutting where it should be cutting, and you see a predictable pattern in its behavior, then calibration may help.
The fact you see a predictable pattern in the above scenario (i.e., the cuts are always off by 1/16" to the left or whatever) is a strong indicator that adjusting the offsets may be all you need to do. That's where calibration comes in.
The reason I say not to calibrate a machine that's behaving just fine is because it's not necessary--you wouldn't do a total engine replacement on your car if it were already in peak running condition, right? So, if you're not having problems with normal cutting, then you don't need to calibrate.
Is that any clearer?
-Mel