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Some context is necessary to understand the passage.
Jacob is afraid in Genesis 32. His whole life he has deceived people. For example, he stole his brother’s blessing and in the process tricked his father (Genesis 27). He also he deceived his uncle, Laban, out of his flocks (Genesis 30:25-43). It is no wonder that his name in Hebrew means, trickster. Now he has to get ready to face his brother, Esau, who seems to have an army. Hence, there is fear in Jacob's heart.
However, something happens that night. He wrestles with a supernatural being to the break of dawn. It is clear that this being more powerful than he is and that Jacob will not win this one. Or we can say that this being cannot be tricked! With a mere touch of his hand, Jacob’s hip is dislocated.
In desperation, Jacob asks this being for his name, but this figure would not give it. After the struggle, Jacob realizes that he did not wrestle with just a man but God himself. Genesis makes this point clear as this figure concludes the bout with these words: "Your name shall no longer by Jacob, but Israel; for you have striven with God and with men and prevailed." (Genesis 32:28)
Two things happen to Jacob. First, his name changes to "Israel." In short, he is promised that through him there will be great descendants. If you did not know he becomes the father of the tribes of Israel. Second and more importantly his character changes. After this episode, he becomes a new man. He no longer cheats people. His encounter with this divine being made all the difference. Jacob, the trickster is gone forever.
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