When you're privileged, you enjoy some special right or advantage that most people don't have. You could be privileged to live in a lighthouse and have a spectacular view of the bay.
People can be privileged in many different ways, but it always means that they're getting some unusual deal that others probably envy. You can be privileged because you have plenty of money and get to travel the world, or you can be privileged to know interesting people who inspire you. Another meaning of privileged is private or exclusive, as in privileged information that's only available to a few people.