Priority means first thing first. Setting priority means making first thing first in your daily life. It also means spending your time on things that are of most importance or value to you. It's like doing things that matters. It's committing yourself to tasks that would have grave consequences if let undone, or giving yourself to an assignments that would bring you the most profitable rewards.
Setting priority is one of the most successful habit you can have. It's one factor that contribute most to the success of every great individuals you have seen. It can makes somebody out of nobody, and can turn slaves to kings when practiced.
This is it: setting priority makes things to become more important in your life. Once you give your time continuously to something, the thing would increase and tend to 'dominate' your life. You would give more time, thoughts, actions and physical space to such thing. Everywhere around you would speak about the things you have prioritized in your life.
For example, if your first priority is to make money, you would always think about how to make money. You would talk to people about money, you would purchase books on making money, and you would want to associate yourself with people that you know that can give you money - the thoughts of money will become your priority. It will dominate and control your time.
The point I'm making is this: only give priority to things of high value in your life. Abolish all the irrelevant things, and commit yourself to only activities that would make you great in life.
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