cw1 is a specification for proxy contracts based on CosmWasm. It is a very simple, but flexible interface designed for the case where one contract is meant to hold assets (or rights) on behalf of other contracts.
The simplest example is a contract that will accept messages from the creator and resend them from it's address. Simply by making this transferable, you can then begin to transfer non-transferable assets (eg. staked tokens, voting power, etc).
You can imagine more complex examples, such as a "1 of N" multisig, or conditional approval, where "sub-accounts" have the right to spend a limited amount of funds from this account, with a "admin account" retaining full control.
The common denominator is that they allow you to immediately execute arbitrary
CosmosMsg in the same transaction.