precise is the release name of 12.04.
Explanation of the Repository format from Ubuntu Wiki:
deb: These repositories contain binaries or precompiled packages. These repositories are required for most users.
deb-src: These repositories contain the source code of the packages. Useful for developers.
http://archive.ubuntu.com/ubuntu: The URI (Uniform Resource Identifier), in this case a location on the internet. See the official
mirror list or the self-maintained mirror list to find other mirrors.
precise is the release name or version of your distribution.
main, restricted, universe and multiverse are the section names or components. There can be several section names, separated by spaces.