Regions provide the ability to split the screen or window up into sections. This can be defined on an application level or applied globally. In the context of an action, it allows you make part of the action's definition also be tied only to one or more of the defined regions.
This lets you have the same gesture perform different actions based on the location of where the gesture began. A simple example would be if you set the region for an application to Vertical Split, you could then assign the same gesture to perform a different action if it was drawn on the left or right side of the application.