I think they mean less private for-profit companies, and more NGOs, little municipal-government projects, and the like. The types of things where it's natural to get your city's or state's official registry to nest your project under their namespace.

In Canada, all our federal-government stuff is under .gov.ca, and all our provincial-government stuff is under .gov.[province].ca. But those .[province].ca domains can also be used by any org located in the province, that asks the province nicely. (Examples: http://www.bccancer.bc.ca/, https://spca.bc.ca/)

This same pattern is, AFAIK, followed by pretty much every other country. .gov.[province/state/region].[country] reserved for the regional governments; .[province/state/region].[country] available upon request to orgs that make sense to be nested there.

I understand that the US uses .gov for its federal-government stuff; but why is e.g. the Legislature of Idaho at https://legislature.idaho.gov/ rather than being at e.g. legislature.gov.id.us ? Why weren't swathes of the .us ccTLD reserved for this use, to mirror what basically every other country does with its ccTLD?