CHMOD stands for Change Mode and simply means that you are changing your permissions on the file or folder. "CHMOD" is also a UNIX command that is used in code and through the command line to change permissions on files and folders.
For example, in PHP it's used like this: chmod("/path/to/filename", 0755);
There are three types of permissions to set on folders and files on UNIX servers – Read, Write and Execute permissions. There are three distinct groups that are affected with these permissions to allow you to control who has access to the file or folder.
These groups are as follows:
The owner of the file - usually whoever uploaded it, or whomever created it.
The group – usually other registered hosting users on the actual server or common resources that are setup to run under this permission group.
The public – this is the public or Internet user.
So each group has three settings or switches, to allow you to control their access based on whether you want them to read, write or execute the resource that you are setting permissions on. For example, you can allow the owner group to read and write to the files, while the group and public can only read.