Mac storage basics · System Data and the storage categories
What is iOS Files in Storage settings?
Short answer: iPhone and iPad backups and update files stored on your Mac. You can review and delete old ones from the category's info button.
iOS Files are backups and software update files for iPhone and iPad that your Mac has stored. Selecting the category's info button lists them with dates, so you can delete old backups of devices you no longer have or don't need.
Delete a backup only when you're sure you won't need it to restore that device — iCloud backups are separate and aren't affected. See managing iPhone backups.