It is used in connection with a lid, cover or a door. It means to put something in the path of the door or under the lid or cover so that it doesn't close. A person can be what props the door open.
"He put a brick in front of the door to prop it open."
"He held the door, propping the door open, to let the others in."
"He opened the car hood and propped it open with the swinging bar."
"He propped the lid of the chest open with a stick."