It's another receiver at a known location.
Atmospheric conditions cause errors that are in some cases hard to predict.
If you have a GPS receiver at a known nearby location, you can subtract the difference from what you receive and what you would expect to receive at your actual location, and then add that in to your GPS receiver at the unknown location.
It needs to be nearby because you want the atmospheric conditions between your fixed receiver and your moving receiver to be as similar as possible.
See https://en.wikipedia.org/wiki/Differential_GPS for more information
Also https://en.wikipedia.org/wiki/Real_Time_Kinematic is what's used to get ~1cm accuracy, but RTK would not be useful because while RTK increases precision of the measurements it does not (by itself) eliminate errors introduced by the atmosphere, which are already larger than what can be obtained without taking carrier phase into account.