A parameter is a value that was passed to the actual script. All parameters (if any) are accessible over the array _this.
[5, "string"] execVM "script.sqf"
_number = _this select 0; _string = _this select 1;
_number and _string are considered the parameters of the script, and are filled with the values that were provided in the array. _number now contains the value 5, while _string now contains the value string.