Stat priority determines which stats will be raised the most. The ordered approach is designed to optimize the character's performance in battles, which depends on the impact of each stat rather than their numerical values. The combined approach is designed to optimize the raw sum of stat values regardless of practical usage. For more details about these approaches, see section 3.1 of the Perfect Stats Guide..
If you want to optimize for an approach that's different from ordered or combined, you can also select "Custom". You will then be able to specify a different way to order and combine stats in the next step, after you click "Continue".