Blockchains such as ethereum only have access to a limited amount of information. They are great for tracking an account's cryptocurrency balance, for example. If you want your smart contracts to use information about the outside world such as cryptocurrency prices, sporting events, or weather, that data has to be put on chain somehow. One way of solving this problem is by having a single whitelisted address submit this data on-chain. This creates a central point of weakness in a protocol, however, as this single address could fail or be malicious.