Unlocked means it will work on any GSM carrier. That would be AT&T and T-Mobile in the USA, and any MVNO that uses their towers. It will not, however, work on Verizon or Sprint.
The advantage of using an unlocked phone is that if you switch from AT&T to T-Mobile, or vice-versa, you can easily take your phone with you. In addition, if you travel to another country, you will be able to purchase a SIM card that will work on this or any other unlocked phone.
Most carriers will unlock their phones because of consumer pressure, so purchasing an unlocked phone is not a huge deal anymore. I purchased the Honor 6X not because it is unlocked, but because it is an exceptional bargain.