Said made this comment in his 1993 book Culture and Imperialism, a follow-up to his groundbreaking Orientalism. In Culture and Imperialism, he focuses on literary texts that he argues support, either silently or openly, the British imperialist mission.
The quote, therefore, goes to the heart of the...
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thesis of Said's book. Imperialism is a dirty business, he argues, in which one country subjugates and exploits other countries or territories for its own gain, using brutal military or economic means that it doesn't want its citizens to examine too closely. In order to make this ugly business acceptable to the ruling country's own population, ruling classes need to make this imperialist system seem natural and good.
This is where "culture" comes in, Said says. In order to gain public support for a cruel and immoral system, literature and other artistic media have to depict it in a positive light. Culture thus becomes tied up with politics (imperialism) as cultural elites reward and validate those books that tell the story the elites wants told.
The quote means that there is more than one way to tell a story, and how that story is told is both crucially important and closely aligned with power. The powerful can and do promote the narrative that serves their interests, and they do their best to discredit alternative stories that might paint a less flattering picture.
Said focuses on iconic British novels such as Jane Austen's Mansfield Park, noting how that novel, in his opinion, gives implicit support to imperialism: the wealthy Bertrams are dependent on sugar from a slave plantation in Antigua, and the novel tactfully approves brushing this unpleasant fact under the table as something not to be spoken of. Later, novelists such Rudyard Kipling justified imperialism more openly as a good system and portrayed darker-skinned peoples, such as Indians, as in need of and benefitting from the imperialist system.
In a nutshell, powerful elites have an oversized influence on what stories get told and use those that buttress their position while suppressing (as far as they can) those that don't. Without the right stories, it becomes much harder to gain public acceptance for immoral systems such as imperialism.
In Kenneth Johnston's Unusual Suspects, all the "soft" ways the British elites punished and blackballed writers who were considered too radical during the Napoleonic era are discussed. It doesn't take throwing a person in jail or banning their books to silence them: refusals to publish an author, writing bad reviews, and other forms of exclusion can drive artists (who need money to live) to change their message.