Context variables are the variables which can have different values in different environments. You can create a context group which can hold multiple context variables. You need not add each context variable one by one to a job, you can simply add the context group to the job.
These variables are used to make the code production ready. Its means by using context variables, you can move the code in development, test or production environments, it will run in all the environments.
In any job, you can go to Contexts tab as shown below and add context variables.