It shows you the level of effectiveness for your players in that particular game. Skill level is a huge part of it, but other factors include game shape, level of opponent and how well each particular game's tactics suited your players' skillset.
Breaking it down slightly more directly (all numbers are purely for the sake of example, not intended as fact)..
Say you have a player who would have a rating of 10 with all things neutral- 7 game shape, base offense, man-to-man, and an equal opponent.
Worse game shape might bump him down to a 9 rating, whereas a higher game shape might bump him to 11
If your player has stronger inside skills- having an inside-oriented offense would likely increase his rating, while an outside-based offense might hurt. Likewise for defenses.
The other major factor is your opponent- a good opponent would hurt your players' rating, while a bad one would boost it. Similarly- the tactics they employ alter it as well.
Home/away boosts help a litte, and minutes played in relation to stamina plays a large part as well.
All in all, it's a measure of how effective your player is on that given day, largely irrelevant of the statistical output. If you have a player who's usually a 10 rating put up a 12 rating in a game, but his statistics were ineffective, it's a sign that those tactics were a good fit, but you got a bad roll in the game engine for that day.