Precision basically means the ability to hit consistently close to the target you are aiming for. The higher the precision, the closer you can get, on average. WGT explains it as a kind of circle which forms around the spot where your shot would be expected to land, once you figure in the distance, wind, etc., whether you hit the ding or early or late, and so on. Within that imaginary circle, your ball will land somewhere, within random variations. The more precise clubs simply have a smaller circle, so the ball is more likely to land where you aimed, factoring in also your execution of the shot.
The most precise irons, for example, can reliably be landed within about 2 yards of the hole on a typical approach shot, if the shot is planned and executed correctly = 1-putt range. Some of the less precise irons may land more consistently within 2-putt range.
P.S. I see that while I was drafting my treatise Yankee Jim just went on and answered your question.