The KM Wiki defines it likes this:
Tokens in Keyboard Maestro represent placeholders for information about a specific object.
If this definition is not useful for you (I don’t find it too bad) and you are familiar with the concept of variables, then maybe it helps to see a token as a special kind of variable. The “special” things are:
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You cannot change the name of a token
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The value (content) of the token is always the same, example:
%Return%,
or it always refers to the same object, example%TriggerValue%,%SystemClipboard%, (the value can be different here)
Not sure, if it is clearer now…