It's hard to describe this tool because it's so wide-ranging. Originally it was to simply perform actions based on keyboard shortcuts. But it can actually perform actions based on many triggers. These can be plugging in drives, time of day, specific application opened, etc. The actions are too many to mention but could be from rearranging windows on your screen to sorting your email to downloading files and pulling text out of images.
You'll find there are many utility tools available for the Mac who's sole purpose can actually be accomplished by Keyboard Maestro. It's an all purpose tool for controlling anything on your Mac.
For example there are many window arranging apps on the Mac, such as Moom. These allow you to set up specific arrangements and sizes of different apps to create sets of display conditions. If you want some kind of communications mode you can with a simple selection or keyboard trigger set up your email client and chat app, along with some other browser pages and all arranged consistently every time. Even more useful if you use multiple screens and monitors.
While there are specific applications to do this, it's worth noting that you can achieve all of this in Keyboard Maestro too. While not a dedicated app (meaning it may be difficult to set up that some other sole purpose app) it can tie in so many other things too. Maybe you want it triggered via some other means such as time of day and also do additional actions than just arranging windows.
A further example of the power of Keyboard Maestro is you could use those specialised apps like Moom and use Keyboard Maestro to open and use them. So it allows you to take advantage of anything.