Just like golf, tennis, or any other thing:
Open tournament anyone can join.
Closed tournament you have to be invited.
Usually people invited to closed tournaments have a certain national (or international) ranking, or have recently won a big tournament, or they won last year's closed tournament, that sort of thing.
For example in an open chess tournament with a lot of players, maybe in the first round there will be a GM vs a very low rated player, like 1500 vs 2500.
In a closed tournament, usually every player is a GM.
In the strongest tournaments, every player is over 2700.
The question above. An answer would be helpful. Thanks