When you "Revoke" a permission, you revoke, remove, deny that permission to a user. For example, for registered users you Allow them to post new threads, but you have an announcements forum you want only administrators to post to, you edit the node permissions for the Registered group and Revoke the "Post new threads" permission, and explicitly allow it on the administrator user group.
Inherit means that you haven't set the permission (Not Set (No)), and it will use the values provided by other user groups or node permissions.