Gauge

On a ball of yarn, all guage is based on a four inch square.  It also depends on the correct needle or crochet size.  Your pattern is saying if you use the needle it suggests for that yarn - number is sitting at the top of the little square - you should have 11 stitches across for 4 inches and 16 rows down for 4 inches.  You show make a little sample for yourself of a little more than 4 inches.  So knit 15 stitches for 20 rows.  You should have a square bigger than 4 inches.  Then measure the 11 stitches across and 16 rows down and see if it is in fact 4 inches.  You want to do it slightly bigger because it is easier to see the correct number of stitches and rows.  Everyone knits differently, so you should make a square before starting a project that needs to have the correct gauge.
Hope that helps.