How it works
You name the return you are aiming for, and Google fits the bids to it: where the chance of an expensive order is higher it bids more, where it is lower it backs off.
How it differs from ROAS
ROAS is a fact: how much has already come back over the period. Target ROAS is the goal you set the strategy for the future. They are easy to mix up, because they are measured the same way.
Hence the practical consequence: the goal is not the same as the expected result. Set the goal above your historical ROAS and you do not raise your income — you narrow the range of impressions down to the safest ones, and revenue usually falls as the figure rises.