Type describes the build of the cat's body and the shape of the face. The breed standard describes how they would like to see the build of the cat's body. A cat who closely follows the breed standard that way has a good type. So the ideas of good type differ from breed to breed and can be developed over time.
To give you an idea, in modern Persians a flat face is considered good type, more of a face/nose isn't favored as much. Oriental cats are built sleek and elegant, whereas British shorthairs are cobby. Type is what sets breeds with the same colorations/patterns apart. To me, the most distinct difference between a blue British shorthair and a Russian blue is their build.