At a steady pump rate it is the pressure needed to push mud through the surface lines, down the pipe, through the bit nozzles, and back up the annulus. A rise at constant rate can be a plugged nozzle or cuttings packing off the annulus. A fall can be a washout in the string or a pump that is no longer moving the volume the driller thinks it is.
A kick can lower it as well, because formation fluid in the annulus is often lighter than the mud it replaced. It is one of the first gauges watched for that reason. During well control, the circulating pressure held on the drill pipe is a standpipe pressure with a calculated margin added.