It just describes the relation of this class with the containing class.
Inner classes are classes defined within the scope of another class. Instances of inner classes are attached to a specific instance of the container class (the instance in which they were created).
Static nested classes are nested classes, but are defined static. Like static members, they have no relation to a particular instance; they just belong to the containing class. In nested classes, you can't refer to non static members/methods of the containing class, since there's no particular instance associated with them.
