It refers to the territory of today's Germany. As one wholesomeunited state in more or less modern form, Germany didn't exist until late 19th century (1871). Hence we must resort to using this word when referring to what was on this territory during the Middle Ages or in the Stone Age. Further example:
Die römischen Gebiete im heutigen Deutschland verteilten sich auf die Provinzen Germania superior, Germania inferior und Raetia.