Conversion refers to any significant action taken while visiting a site. For example, requesting information, making a reservation / booking and so on. In martketing terms this is known as a 'call to action'.
Every page on a site should have a call to action whether this is as simple as to direct you to another page (i.e. limit bounce rate), to fill in a form or to get you to click a button to purchase a product.
It is important to understand the conversion factors for each page and to understand these, you first need to define the goal / objective of the page.