This section appears only for post query and it is helpful to restrict your query using taxonomy terms like categories, tags, or any custom taxonomy. See WP Documentation.

• Relation:  Relation for the taxonomy query. Use AND if you want all conditions to be true to select the post, OR if you only need one condition to be true.
• Taxonomy: The taxonomy you want to use his terms to check again the post terms.
• Operation:  Operator to test. Possible values are ‘IN’, ‘NOT IN’, ‘AND’, ‘EXISTS’, and ‘NOT EXISTS’.
• Terms: The terms from the taxonomy selected above you want to check using the operator above.

You can create several groups of taxonomy + operator + terms, to satisfy the condition you want to show the posts.

Let’s say that, for example, you want to show posts from the category ‘Blog’ OR posts with tags ‘web development’. For this use case, you will select the OR relation, and create two groups of conditions one for categories IN ‘Blog’ and another for tags IN ‘web development’.