In most headset designs, bearings sit between a pair of cups and races, one half on the fork steerer and the other half press-fit into the head tube.
If the cups are not parallel at both ends of the head tube, then you'll find it difficult to adjust the headset to the proper tension without binding - the cup will be meeting the race at an angle and it can seem too loose in some places and too tight in others.
The process of facing is ensuring that the ends of the head tube are parallel. The previous question of Why don't frame manufacturers ream/face their frames?Why don't frame manufacturers ream/face their frames? addresses a little bit how a new frame can end up needing to be faced. In general many frames manufactured today don't need it, but if you are having issues it's certainly worth pursuing.