RSS isn't specific to Lemmy. It's a standard that has existed for a long time. It stands for Really Simple Syndication (or also apparently RDF Site Summary). It's a way for websites, blogs, link aggregators, news sites, anything really that has content that updates, to provide a simple, platform agnostic method for users to subscribe to that changing content.
You would use an RSS reader, or maybe some software that isn't specifically an RSS reader but supports RSS subscriptions (Outlook is an example of an email client that you can add RSS subscriptions to), then your RSS reader takes care of fetching updates, and you have a perpetually updating feed of your subscribed RSS content in one spot. An RSS feed item usually has a link, some text, and sometimes other content. So you can read a summary, follow the link to read the whole thing, etc.
For Lemmy, you can subscribe via RSS to your Subscription, Local or All feed, with whichever sort you want. But you can also subscribe to specific users' comments to be notified whenever they make another comment.