The margins set up in the Paper dialogue box define the area in which you could place text if you wanted to. They provide the limits of the printable area. On screen you will see that the area beyond the printable area is shown in light grey, and you will be unable to place text or pictures there.
Entries are shown for top, bottom, left and right margins. You can increase or decrease the margins using the arrows.
If your document is to be printed double-sided and/or bound up, you should consider setting an extra Binding margin to take account of the space used up by the binding. This will ensure that an adequate space is left for the binding and that your text will not disappear into the binding.
To set a Binding margin: