Pick a wire that won't overheat
A wire that's too thin gets hot under load. That's a fire risk. In the US, the National Electrical Code (NEC) sets how much current each wire size can carry, in table 310.16.
The calculator reads the load amps, the material, the insulation rating and the conduit fill, and gives the smallest AWG that fits. It also checks voltage drop over the run length.
Ampacity and voltage drop
Ampacity is the safe current limit for a wire. Voltage drop is the loss along a long run. A wire can pass the ampacity test and still drop too much voltage over 200 feet, so lights dim and motors run hot. A common design goal is 3 percent or less on a branch circuit.
If the drop is too high, the tool steps up to a larger wire.
Derating and copper versus aluminum
Several wires in one conduit can't shed heat as well, so the NEC reduces their rating. High ambient temperature does the same. Enter the count so the tool derates for you.
Aluminum is cheaper but carries less current, so you go up a size or two. It needs proper connectors too.
This is a planning aid. Local codes and inspectors have the last word, so have a licensed electrician confirm the final design.