If lots of people respect you and you're known around town as a wise and intelligent person whose opinion matters, then you're esteemed.
Esteemed comes from the verb esteem, which means "to think valuable." If you are esteemed, then people think you're a valuable person to have around, and have a lot of respect for you. If you're hosting a dinner party with a special guest, an elderly man who has traveled the world and written many books, you could introduce him as your esteemed guest.
