It means the synth can play up to 16 notes at one time.
In some synths, a complex patch may require 2 "notes", so you can only play 8 notes with that patch. If its a multi-timbral synth, you can play ( with the help of a sequencer) UP to 16 tracks if you only use one note on each.
You must be looking at an older synth or perhaps an analog emulation one. Most modern synths ( like a Roland or Korg) will have at leat 64 note polyphony, unless it is designed for a dedicated purpose ( like a fancy one with a zillion knobs for fat, analog sounds).