The term "pole position", as used in F1, comes from the horse racing term where the number one starter starts on the inside next to the inside pole. The term made its way, along with several other customs, to auto racing.
In F1, a driver has pole position when they start a race at the front of the grid. After final qualifying session Q3, the driver with the fastest time in the top 10 shootouts is said to attain the pole position or in general is referred to as the "polesitter".
In other words a driver or car that sets the fastest time qualifies at the front of the grid and is said to be on pole position.
NOTE: Different motorsports series use different formats for determining which driver has the opportunity to start from pole position.