With @Box’s indulgence, I’ll attempt to answer.
A “context” is a niche in the hierarchical structure of a model. It is the place within that structure that a particular object is located or contained.
Most contexts consist of the stuff inside of a group or component. By “stuff,” I mean either raw geometry, such as edges and faces, or other groups and/or components. There is also a context outside the confines of any group or component, namely, the top-level model context, which is the context that is active when the model is opened, and which contains everything else.
When “you” (the camera, actually) are “in” a particlar context, you have access to the objects it contains (and when you’re not you don’t), and you can edit them to the extent they can be edited. You can add, modify, or remove raw geometry (or make a mess of it), and you can add or remove other sub-groups. You “enter” the editing context of a group by double-clicking it, or right-click > Edit Group/Component. You exit by clicking outside the group or right-click > Close Group/Component.
For two or more elements of raw geometry to interact with each other–to cut each other or stick together to form more complex shapes–they must be in the same context.