Every process and every application running on your computer is associated with a directory on the filesystem, called the "current working directory".

On Microsoft Windows, if you open a Command Shell (by running cmd) you'll see the current working directory of this shell in the prompt. (e.g. c:\users\Foo Bar\Desktop> indicates that the working directory of this cmd window is c:\users\Foo Bar\Desktop>. When configuring a new launcher icon, one can set what should be the initial working directory of the process.

On Linux, Apple OSX, and Unix in general the command pwd means print working directory and it is used to fetch the current working directory.