I also had trouble understanding that from their description, but then at some point I think I got it. Is I understand, it's like if you used Lua (actually, a Lua-like language dubbed "Terra") in places where you'd normally use the C preprocessor, or C++ templates, or Lisp macros, or Rust macros, or inline assembly fragments in C/C++. While your "base language" that you'd use to write most of the code would be your regular old Lua. Does it make more sense when described this way?

edit: so, from reading the other comments around, I think the language roles are actually reversed vs. what I thought - i.e. Lua is the "macro language", and Terra is the "main language".