On Windows, filenames are usually not case sensitive, while they usually are on Linux and BSD platforms. Mac OSX depends on who set up the operating system, they may have picked journaled case sensitive or not case sensitive. Usually files on a Mac are not case sensitive, however, the OS does handle two files in the same folder with a different case.
Modern Pascal applies the above rules and logic and sets this constant at run-time. Allowing you to incorporate logic in your code to handle environments where 'myfile.dbf' could be stored as 'MYFILE.DBF', 'myfile.DBF', etc. This example is very common when working with legacy xBase files. Some programs append the .DBF to the filename you supply, as an uppercase string. So, if your code is doing a FileExists('myfile.dbf'), you may not see that the file does exist as 'myfile.DBF' and potentially lose existing data.
These features are included so you will code your application to work on multiple platforms without error.