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It means there is no flow of electrical signal between the two rather the electrical signal is converted into light signal which travels between the two.
in switching power supply, in one side you have 220 (or 110) volts and in the other side, you have another voltage that can be lower or higher, if you don't isolate one side from the other, you may get shocke whan you touch one of your output wires and it will be so dangerous. optocoupler makes an optic coupling between two sides and prevents this. in some applications, you need outputs that are isolated and have differnet grounds. it's another purpose.
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