You should also be able to see this same scale in the viewfinder. What that scale represents, in part, depends on what shooting mode your camera is in.
If you are in an automated mode (Av/Tv/P/Auto, the scene modes, etc), then it acts as an exposure compensation scale. It is marked off in exposure values (EV), or stops. Dialing it to the + side of the scale increases your exposure (makes things lighter) by however many stops you dial in; moving to the - side of the scale decreases your exposure (makes things darker). Whatever you set on the scale will be used for all shots until you adjust it again. Because you are in an automated exposure mode, the camera's auto-exposure system will always try and set your exposure settings to what it considers "correct" exposure--i.e., the needle always starts on the 0 until you dial something in.
If, however, you are in Manual mode, then that scale acts more as your camera's light meter, relative to where the auto-exposure (AE) system has set the exposure. You can actually be past the ends of either end of that scale in M mode. Dialing your way to 0 with any combination of iso, aperture, and/or shutter speed will simply be using the exposure the camera's AE system thinks is good. And you can still think of this as exposure compensation, only that you don't necessarily start with the settings that yield 0, you just start with what your current settings give you.
The camera's autoexposure system uses algorithms on the values from the exposure sensors (you can limit the area or bias towards center or a spot sampling) to calculate a single overall exposure value. It then tries to represent that value in the middle of the tonal range (i.e., "middle gray"). And for a lot of scenes this works. But if a scene is preponderantly darker or lighter than the middle of the tonal range (i.e., a snow scene or night sky), then the AE adjusting your camera exposure settings to put that derived value in the middle of the tonal range can lead to over or under exposure. Which is why we like having an exposure compensation scale or full Manual mode.
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