What it is
It is the model's "working memory" in a conversation: everything you send plus everything it answers has to fit in that window. If you go over, the model loses or skips part of the content.
Why it matters to an agency
It determines how much information (documents, history, instructions) you can give it at once. Large contexts let you work with full documents without chopping them up as much.
Example
Pasting a 40-page contract and asking for a summary only works if it fits in the model's context window.