This is a measure of visual acuity, or the smallest details that can be resolved
One example is when you are driving at night and see one headlight approaching you, but as you get closer, at some point you become aware that there are actually two separate headlights. The distance that you can see two distinct lights measures a type of acuity
The first (or top) 20 in 20/20 denotes the distance that you are viewing from (20 feet in the US or 6 meters in Europe)
The second (or bottom) 20 in 20/20 denotes the size of the letter that you are able to see
How do people normally describe the size of a letter? The most common way is for someone to talk about 12 point font.
The way we do it in optometry is to define a 20 foot letter as the size required so that the full height of the letter takes up 5 arcminutes (or 5/60 of 1 degree) which ends up being 8.75 mm (or 5/16 inch) at 20 feet
What does it mean if you have 20/40 vision? You have vision that is 2X worse than 20/20
What is the best possible human vision? 20/10 or more likely 20/15, but most standard eye exams only test to 20/20
From the 2020 California Driver Handbook (page 20):
DMV screens all drivers to measure vision with or without corrective lenses
If you do not meet DMV’s vision standard (20/40), you will be required to visit a vision specialist
The DMV representative will give you a Report of Vision Examination (DL 62) form to have completed by a vision specialist
If your vision is not worse than 20/70, DMV may issue you a 30-day temporary DL to allow you time to have your vision checked
All drivers applying for a DL must have a visual acuity better than 20/200 (best corrected) in at least one eye before a DL can be issued
You are prohibited from using a bioptic telescope or similar lens to meet the 20/200 visual acuity standard in the better eye
Requires each eye corrected to 20/20
If uncorrected vision is between 20/25 and 20/60 in your worse seeing eye
You need to wear glasses or contact lenses (hard or soft, which you must have been using for at least 1 year)
If uncorrected vision is 20/70 or worse in your worse seeing eye, you need to wear soft contact lenses, for at least 1 year
Requires each eye corrected to 20/20
The uncorrected vision must be 20/40 or better in each eye
Requires each eye corrected to 20/40
Requires each eye corrected to 20/30
At least 20/40 in one eye and 20/70 in the other eye without correction
Requires each eye corrected to 20/20
https://lowvision.preventblindness.org/state-vision-screening-and-standards-for-license-to-drive/