Think of the stars as flags or labels that you can decide personally or with your team how you use them. There are no rules.
Some use them to set different priority levels.
Others to group similar items together.
Each click advances the color once. There are 3 primary colors and the fourth one is transparent. So you have a total of 4 stars you can use.
RAG (red-amber-green) are often used for such labeling, you can read more here: https://blog.weekdone.com/rag-rating-project-management-status-reports/