What does `type` keyword actually means when used in a type definition?

Consider the following code, and note that the procedure Check() has a var parameter:

type
  Ta = string;       // type alias
  Tb = type string;  // compatible but distinct new type

procedure Check(var s: string);
begin
  ShowMessage(s);
end;

procedure TMain.Button2Click(Sender: TObject);
var
  a: Ta;
  b: Tb;
begin
  a := 'string of type Ta,';
  b := 'string of type Tb.';
  Check(a);
  Check(b);
end;

Check(b) results in a compiler error: E2033 Types of actual and formal var parameters must be identical

In the above, type Tb is compatible with string in that you can f. ex. assign a := b, but it is distinct in that the type identifier (under the hood) has a different value, and therefore not accepted as argument for Check(var s: string).

Type declaration like

TCaption = type string;

creates new type with different RTTI information. Also it cannot be used as var parameter of function if string type needed.

New RTTI information "...ensures that at run time, variables of this type are identified by their new type name...". So if you try to get type name for an instance of TCaptionSame = string;, you'll get string, while for TCaption type variable you'll get TCaption

To get more exact information, it would better to refer to official help