My understanding goes something like this.
A secondary uses incoming SATs / CATs they run / initial performance in class to identify a starting position for a pupil. From there they guestimate a rough place the pupils will be on at the end of GCSEs.
So e.g. A child coming in with 115 in SATs will be on a 'pathway' to GCSE grades 7-9.
When giving reports they will indicate whether a pupil is making progress as expected against this pathway, or is going better or worse.
It used to be done with NC levels but they got thrown out without anything to replace them.
Now of course for an individual pupil pathways set in y7 can be very wrong by the time you get to y11. At the moment even on average for a cohort they could be far off as the new style GCSEs haven't been sat yet (except for maths & English).
A school however shouldn't limit a pupil's teaching due to their pathway. So it should be possible for a pupil to outperform initial expectations.
Some (a minority of ?) schools may also use pathways to channel a pupil into particular GCSE options. e.g. Some schools at least give children option forms on different coloured paper with e.g. the blue paper meaning they have to do an MFL the green having an optional MFL and the white no MFL option at all (or whatever).
Of course, your school might be using the term completely differently from my understanding. 