The fontsize is the size of the letters on a page. Digitally this is measured in pixels. In applications like Word most people are used to set text in 10 or 12 pixels. This is fine if the document is printed.
This trend seeped through to websites, but the way people read text is different on screens than it is on paper. The distance between the reader and the words is greater. Also the resolution on paper is better on screen. That's why it's necissary to use a slightly larger fontsize for screens, starting at 16 pixels.
Read more in this article about 16 Pixels Body Copy for more information on font size