What does it mean for a mobile app to be “context aware”?

Context awareness is a property of mobile devices that is defined complementarily to location awareness.  Whereas location may determine how certain processes in a device operate, context may be applied more flexibly with mobile users, especially with users of smart phones.  Context awareness originated as a term from ubiquitous computing or as so-called pervasive computing which sought to deal with linking changes in the environment with computer systems, which are otherwise static.

Ref: Wikipedia