Dividing data into smaller categories so you can grant and restrict access to different kinds of data. It’s a security measure that allows people to access only the data they need for their work, to minimize the damage if their account is compromised.
Think of a bank: different employees have different kinds of access in the building. Some can only access the first couple of floors, while others may come and go as they please through the main building. A select few are allowed into the main safe. Fewer still have the key to the underground vaults where the valuables are kept. This hierarchy keeps the contents of the bank safe because fewer people having access means a smaller chance of human error such as a lost key, a stolen ID, or miscommunication with the guards.