A critical incident in the NHS is defined as
"any localised incident where the level of disruption results in the organisation temporarily or permanently losing its ability to deliver critical services, patients may have been harmed or the environment is not safe requiring special measures and support from other agencies, to restore normal operating functions."
it is "principally an internal escalation response to increased
system pressures/ disruption to services that are or will have a detrimental impact on the organisation’s ability to deliver safe patient care."
In practical terms, it means the Trusts involved can make decisions, impose strict prioritisations/triage, and ask for assistance in a specific manner centrally directed by the Action Plan, with clear lines of responsibility, in a much more directed (escalated) way than everyone struggling on independently. For example, they can co-ordinate the cancelling of services or redeployment of staff, and centrally co-ordinate communications as to what and why.
It's basically a centralised, organised way of saying "we have a big problem here, and we need to do something extraordinary to cope."