What does 'waiting list' mean?

Every year, we have a "shortlist" of 30-40 candidates with excellent qualifications – from these only the ones who perform very well during the interviews and workshop will receive an offer. If we have more excellent candidates than fellowships these are placed on a waiting list. If one of the selected fellows has to step down, the fellowship is offered to one of the candidates on the waiting list. Also, if a position outside of the Graduate School becomes available, the responsible group leader may ask the Graduate School to recommend waiting list candidates.