Let's clarify what this means in practice. Say you're making an RPG with different character jobs.
Instead of creating separate classes for each character variation, you create a single Job class and define different the different character "types" as data objects. These type objects store the properties that make each character unique, like their stats, abilities, and behavior.
For example, instead of writing separate Warrior, Mage, and Rogue classes, you create a single Job class and define character types as data objects that specify their health, damage, defense, and so on. The character then uses whichever type you give it.