What do the different order statuses mean?

The main flow is Pending → Processing → Shipped → Delivered. There is also:

• Cancelled
• Awaiting Verification: a Bank Transfer or UPI order whose payment proof is waiting for you to confirm
• The return lifecycle: Return Requested / Approved / Rejected, Refunded, Exchanged
• For pickup orders: Ready for Pickup → Collected

Changing a status updates stock and reward points automatically. With the Push Notifications plugin, customers also get an alert when you change an order's status to Shipped, Delivered or Ready for Pickup.