Interpreting a source requires you to think a bit more about what a source says or shows about a topic. This requires you to identify implicit (‘hidden’ or less obvious) meanings in historical sources. You will need to do this most often with visual sources that take time to interpret. However, some written sources will often not be explicit enough for you and they will require your interpretation of the information.
Since this requires you to explain what a source means, it will usually require you to use indirect quotes to summarise the intended meaning of a source.