It's gear ratio between the motor encoder, and the drives encoder output/step input.

For example, a typical modern servo has a 10'000CPR (counts per revolution) encoder.
With no gear ratio, the encoder output from the drive will be a direct copy of the motor encoder (I.e. 10'000CPR)
By changing the electronic gear ratio, instead of getting a 10'000CPR, you can increase or decrease that count by the ratio you input. I.e if you change it to 10:1, you'll only get a 1'000CPR encoder output.

If the drive accepts step/dir, or CW/CCW input, the same applies to the input signal.
Instead of needing 10'000 steps to move a single turn, if you apply a 1:10 ratio, you only need 1'000 steps to move a single turn.