This is the span of dates behind the report period for the same number of days. So if you have 30 days in your report period the previous period is the 30 days prior to the period that you're in. If you filter to a report period of the last eight days the previous period would be the eight days prior.
If you have a 30 Day Selection on October 30th
Report Period = 1 October - 30 October
Previous period = 1 September - 30 September