What does the lottery mean to the villagers and why?
Jackson's "The Lottery" is filled with ambiguity. The reader doesn't necessarily learn details that reveal character motivation (why characters do what they do) and background, for example. Some details are left to a reader's interpretaion, or may have been intentionally omitted because they are not directly relevant to the central idea of the work.
If we stick to exactly what's revealed to us as readers, on the one hand we have a group of people who commit horrible atrocities year after year for no reason other than because they are supposed to, because it's tradition. We have common people willing to go along with the status quo and stone people to death.
On the other hand, the reader does receive indication that the lottery victim is a sacrifice:
Listening to the young folks, nothing's good enough for them. Next thing you know, they'll be wanting to go back to living in caves, nobody work any more, live that way for a while. Used to be a saying about 'Lottery in June, corn be heavy soon.'
Besides using faulty logic, here, Old Man Warner indicates that one villager must suffer in order for all to prosper. Many commentators see this as evidence that the story is a scapegoat story. A depiction of the human capacity to blame a minority in favor of the majority.
However you interpret the story, though, the reader still ends up with a depiction of ordinary people matter-of-factly committing a horrible atrocity. What does that suggest about humans?
To most of the villagers, the lottery is something that is just a tradition. It is something that has always happened in their village and in just about every other place they know of. Because of that, it is something that they cannot imagine doing away with.
Part of the point of this story is that people will do horrible things if they think that is just how things are supposed to be. The villagers are willing to go along with killing a random member of their number each year simply because that is what is done. None of them can really remember why lotteries happen, but they still do them every year without anyone forcing them to do so.