Patentable subject matter refers to things that are capable of receiving patent protection from the U.S. government. According to the U.S. Patent and Trademark Office, "Any new and useful process, machine, manufacture, or composition of matter" qualifies as patentable subject matter. However, the laws and direct creations of nature do not qualify.
Because the laws and direct creations of nature are not patentable, water (for example) cannot be patented. Neither can sunlight or air.
Patent protection is highly relevant in law, because it determines whether or not an inventor can have the exclusive right of sale, which is enforceable by law. If a person possesses a patent, no one else can legally sell the inventor's product. If a person does not have a patent, then they do not possess sole sales rights.