the offset of the rim/alloy is the amount of distance from center of rim/alloy.
in other words how much the rim/alloy goes in or out of the body.
see the picture below.
a + offset rim will reduce the standard track length of the jeep gypsy. (mostly sock rims are + offset ones in almost all vehicles)
& a - offset rim will increase the track length.
but the increased track can also result in the suspension (in IFS) & bearings (in rigid & IFS) issues.
some times the increased track limits the articulation too.
example. armada/bolero rear wheel arch. (even thar )
in stock form the tyre goes in the body tub under heavy articulation (pic 1, 2) , but when the track increases the tyre directly touches the wheel arch thus limiting articulation (pic 3).