Elenarie: You mean the story doesn't evolve based on player's actions? Not sure if that's what you're saying.
kind of, but not necessary. It means that progress in the game is driven by a narrative and the player interacts more with the story.
In WoW the narrative never impacts on progress, and it is perfectly playable without ever noticing it, there is no overachieving narrative, but several so-called self-contained micro-narratives which have no impact, what ever the player does the world never changes (to a degree phasing is changing this, only minimally). The story and the world is the same to all players.
To a degree this is also doable with LotRO, but the story there has much more impact on progression, you are following the narrative of the book and there are much more "stages" in the narrative where the player are at. The world is still consistent, and the world is shared, but it is more important that the players are on the same narrative level.
TOR (and Elder Scrolls Online) take this to the next level, and the narrative is not shared by the players, each player follow individual story arcs (in TOR they are determined by faction and class). The good thing is that this means the developers can deliver a story, the bad part is that it then is not shared. If you team, the other players are not progressing their story, but helping you on yours. The result is that you can then be a "World Hero" saving the world, whereas in for example WoW you cant (there cant be 12 million heroes each saving the world) . It does means that most of the game will probably be instanced....