Input/Outputs Per Second. How many reads and writes can your drive handle every second. This primarily applies to very very small file reads & writes (like 4Kb) on your drive. This number comes in to play when loading your OS as that process is reading a lot of small files. Also while running many applications, including games. IOPS play HUGE with things like databases as there are many very small reads and writes to DBs.
The big number many get hung up on is the sequential performance (2500MB/s, 1800MB/s, etc). That applies for reading and writing larger files (by large I mean like 1MB and up).
For instance, if you have a 2nd SSD in your machine, and you copy a folder that has say 500 files in it of various sizes totaling 40GB over to it from your NVMe SSD, you'll probably see your transfer speed bouncing around between 10MB/s all the way up to 300-400MB/s at times. The dips are when the smaller files are being hit. The spikes to 300-400MB/s are while its moving larger files.
Now you take that 40GB folder and zip it up to a single zip file. Now copy that single large zip file over from the NVMe SSD to the SATA SSD and you'll see your transfer speed sit at the max write speed capability of the SATA SSD you're copying to (maybe 300-500MB/s depending on the destination SSD) throughout the entire transfer. This is because its one big sequential write.