Contrast ratio is calculated by measuring the brightness of pure white and pure black (on the same settings), and dividing the white brightness by the black brightness. So you could have a white brightness of 250 cd/m2 (candels per metre squared), which is fairly typical, and a black brightness of 0.50 cd/m2, divide 250 by 0.50 and you get 500 so the contrast ratio is 500:1.
A small change in the darkness of the black colour a monitor can produce makes a big difference to the contrast ratio. If in my example above the black brightness was 0.25 cd/m2, that would give you a contrast ratio of 1000:1.
So in reality what contrast ratio tells you mostly is how deep a black colour a monitor will produce. If you like gaming with the lights off at night, then go for a screen with a high contrast ratio. If you don't then it's not so important.