The power rating is given in watts and determines the maximum power that the computer power supply can offer. This is a vital number in terms of selecting a power supply.
A computer power supply should never be running at 100% of its power rating capacity. How much power it is producing depends upon the number of components attached to it and the power demands of those components.
When the power supply is running at 100% capacity, it produces more heat. That heat can damage the components in the computer or, at least, necessitate that there be more cooling added to the case to offset this. This is why most builders get a power supply that can handle more than the power demands of the build they have in mind. It ensures that the power supply isn’t maxed out during normal operation.