What is the significance of MDI form?

MDI stands for Multiple Document Interface. It is an interface where an application can present multiple documents or views to the user in a way that aggregates (or collects) them all under the parent application. Microsoft Word is an example of an MDI application; there are many others. Often, each MDI child is constrained to being visible only within the child region of the parent window. Often, the parent window's menu is changed in context with whichever child has focus at that moment in time.