Pics have one or more CONFIG registers which set some hardware related options usually needed at power up. You can only change these registers at the time the PIC is programmed.
The __CONFIG stuff is a macro that sets the relevant config bits in the HEX file that is to be programmed. Each option is a number, you are combining the numbers (bits).
Your pic has one config register - see 'Section 9.1 Configuration Bits' for info on what they do. Datasheet:
http://ww1.microchip.com/downloads/en/DeviceDoc/41190G.pdfAs an example, for your pic:
_CP_OFF is the 'Code Protection bit' and would equal 64 (0b01000000),
_CPD_OFF would equal 128 (0b10000000).
When these numbers are combined you get both bits set: 192 (0b11000000).
However, the config bits in the inc files are written as complements (inverted) - this is why they are combined with an AND (&) instead of an OR (|)
This is how the bits in the config register are set.