Polish is graded the same way as symmetry: Excellent, Very Good, Good, Fair or Poor on a GIA report. Poorly polished facets may reduce the intensity of light reflected from, or refracted into and out of, a diamond. Labs assess polish by examining the diamond, facet by facet, with reflected light under a microscope.
The market has read more into Polish (and symmetry) simply because it is there on the report and because GIA has no cut grade standard. A common polish defect is surface grain lines. Even the most skilled cutter can encounter variations in hardness or grain, just like in wood, as they polish a facet. The result is a microscopic polish line running across a facet. These grain lines are very common in pink fancy colored diamonds, but often they can only be seen in reflected light.
If you choose a diamond with an SI or VS inclusions, a few microscopic polish lines may be of no relevance. But if you were considering buying a Flawless diamond, then excellent polish could be a major consideration.
If the polish is rated as fair or poor, visual performance may be noticeably reduced.