Paired devices are Bluetooth devices which you have already configured to use with your device.
Once a device is paired, its connection with your device is remembered for future use, so that it should be ready to use whenever it is in range and switched on, with no further action required to enable it.
It is possible to have many devices paired with your Android at once, and even to use many devices at once; your Android device does not practically limit the number of pairings that can be remembered. Client devices such as Bluetooth headphones or Bluetooth enabled car hands-free kits, however, may only remember a limited number of recent pairings due to having lower amounts of memory. For example, a Bluetooth headset may remember the last 6 paired devices.
If either device forgets a pairing, or you manually un-pair a device, then the devices will no longer connect to each other automatically and you will need to begin the pairing process again.