It's relative to the pool of individuals, and there are tons of caveats (as other posters mentioned). Despite this, due to the size of the pools of individuals

It's relative to the pool of individuals, and there are tons of caveats (as other posters mentioned). Despite this, due to the size of the pools of individuals and relative seriousness of players who belong to official tournament organisations, the ratings have been fairly stable. Yes, there's been some inflation, but I'd say it's somewhat been in line with the increase in knowledge and training methods. While the system has all kinds of minor issues, it's still "quite good", especially when we compare it to other sports or activities with a more variable pool and quality. In this sense, most people know what 1600, 1800, 2000, etc, mean to fairly precise degree.