What does, "Can act as arcane focus," means?

Removes the need for any special rule or item to cast spells. The item is your tool.
For example, if something requires an arcane focus (either by design or by DN ruling), an item with the description “Can act as arcane focus” can substitute for whatever would normally be needed - a wand, holy symbol, crystal, or similar object. This also includes spell components.

As long as you're holding this item (i.e. staff, rod, etc.), you can cast any of your spells. You don't need any other spellcasting object or component.