Each Deliverable has has multiple steps it goes through as it progresses over the course of a project. (For example, an illustration may start as an "initial sketch" and end as a "final image.")

When you first send the client a Deliverable file to review, that Deliverable is by default marked as the first step for its category (such as "initial sketch" or "rough draft"). When the client reviews that file (or any subsequent files), they may highlight on any of the other steps to indicate that the Deliverable has move on to that next step.