This is the broadest permission Chrome shows on an extension's install screen, tied to the <all_urls> host permission. It is common and often legitimate, but it also means the extension is trusted with everything you see and type on every website, so it is worth understanding before you accept it.
What this permission allows
An extension with this permission can read the text, images and forms on any page you visit and can also change what the page shows or does, for example blocking elements, injecting a widget or rewriting content. It works across all websites, not just ones you visit after installing, which is why Chrome shows a clear warning before you accept it.
Which extensions legitimately need it
Ad blockers, privacy tools, translators, grammar checkers, password managers and accessibility tools typically need this permission because their job only makes sense if it works on every site you browse. A single-purpose extension, such as one that only works on one shopping site, has no reason to ask for access to all websites.
How to check or remove this permission
Open chrome://extensions, click Details on the extension, then look under Site access. You can change it from "On all sites" to "On specific sites" or "On click" without removing the extension. If you no longer trust or use the extension, click Remove from the same Details page or from Manage extensions.