Context is just a namespace of "word: value"-s and an optional link to a parent context. When a word is being searched it looks in the current context and if it's not found it goes up to parent, etc.
One interesting things about contexts are what I called "isolates", a context that is isolated from anything else, but can hold a set of functions specialized for a certain task. Or you can construct and string together custom contexts to create a desired environment for certain code.
When you have a context, you can evaluate code in context, you can call functions in context from outside, you can create functions that are evaluated is a specified context or with a specified parent context, etc ...
You can also move through contexts and list them in Rye console like you would through directories.
I don't know if I answered your question well ... I'm maybe better at showing than explaining. I'm preparing an asciinema demo called "contextplay".