This quotation is most commonly attributed to Albert Einstein, but difficult to track down: Wikiquote sources it from a tribute Einstein wrote for Pablo Casals, and gives the translation as "...the world is in greater peril from those who tolerate or encourage evil than from those who actually commit it." This is also a paraphrase of the famous quote attributed to Edmund Burke, "All that is necessary for evil to triumph is for good men to do nothing," which is itself unsourced.
Regardless of the origin, the sentiment is one of action vs. inaction. It is not necessary for evil to destroy good, or even to subvert it, but to simply be allowed to continue without opposition. If good men refuse to act within their power to stop evil, they are as responsible for evil's spread as the evildoers themselves. In other words, action is a choice, but inaction is also a choice, and can have just as many consequences; if you stand by and watch a man drown when you could rescue him, you are as guilty of his death as you would be had you held his head underwater. In world events, if evil or corrupt leaders are allowed to act without consequence or comment by honorable leaders, the honorable leaders are (in)directly responsible for those evil actions.
This world is filled with evil. There's always going to be someone out there ready to do whatever they have to do to get what they want. The scary thing about this world is the people that just watch from the sidelines and don't do anything about it. For example, a woman is raped in an alley and someone walks by and hears her scream, but they ignore it and keep on walking because they're scared to do anything. This woman is left defenseless and no one seems to care. That's evil. If the citizens in this world would stand up and fight not just for themselves but for each other as well, there would be less evil in this world. But many people are too scared, or think that there actions don't matter so they choose to do nothing. As humans we are built with emotions and for someone to just sit back and watch as more people do more evil in this world, it shows just how much people really care about other people today.
It means that if those people "who sit and let it happen" actually stood up and took action, then we'd be able to put a stop to those people who are actually doing evil.
For example, bullyng in schools. Bullys are the ones who are doing evil, but the bystanders are just watching and not doing anything about it. If the bystanders spoke up and told them that what they're doing isn't funny and definitely isn't right, then maybe those bullys would put an end to their evil.