-S argument starts a embedded web server from the php executable.
It is a small, not for production or public use suitable web server, primarily used for debugging or demonstrations.
localhost:8000 part is of course the address which the server will use.
-t argument lets you specify a directory for the webroot. In this case the
public directory will be used as the root directory for the webserver.
All in all it is a very useful debugging and testing tool since you don't have to setup a whole Apache or nginx server.
But as mentioned above: It is not suitable for production or public use since it's not a fully fletched webserver like Apache!