Steemit reputation is determined by the number of upvotes and downvotes you get, and by amount of Steem Power that went into those upvotes and downvotes. A single vote from a whale can have dramatic effect on reputation score.

Reputation makes it easier to succeed as an author. Posts by reputable Steemians may get more visibility be taking prime positions in feeds, while those made by people with low rep scores tend to be hidden from view.