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Fallout Worlds may sound a bit confusing at first but the main thing you need to remember about the feature is that you get to create your own sandbox by being allowed to bend many rules Bethesda put in place.
Therefore, Fallout 76 players will be able to customise settings such as PvP rules and difficulty or place their CAMPs in areas that were previously restricted. These changes are not on par with what we could do with GECK and Creation Kit in singleplayer titles but they are definitely a significant step in that direction.
The list of customisations seems pretty high even on the announcement page but Bethesda noted they will be adding more in the future which should provide a lot more replayability for those creating these sandboxes and the players who enjoy them.
Furthermore, Bethesda will create several of their own and these will be called Public Worlds. They will be available on a rotating schedule and will have different rulesets in order to provide refreshed experiences even for those who don't make their own worlds.
Fallout 76: Wastelanders
