The more pedantic answer is that the Ruleset files are the data that the openxcom executable reads for all of the objects in the game - items, craft, base facilities, alien geoscape behavior, where to find graphics and sound files, ufopaedia entries, etc. They provide for a more user-friendly way to change anything that isn't baked directly into the program itself. If you look at the (path-to-openxcom)/data/Ruleset/Xcom1Ruleset.rul file (or I think it's split into multiple files in standard/xcom1 for the nightly version), you can find most everything that makes X-COM, X-COM, and therefore change practically anything you like. Adding a mod is basically creating an addendum to this Ruleset file, whether it's changing the size of a map, to deleting everything and building a new game from the ground up. There are a few things you can't change unless you re-write the source code, like the alien battlescape AI.
For the example of changing the map size, the executable reads the data from a Ruleset file under the heading 'alienDeployments:' for the size of maps generated when you assault a UFO. Here's the bit for a small scout map:
alienDeployments:
- type: STR_SMALL_SCOUT
data:
- alienRank: 5
lowQty: 1
highQty: 1
dQty: 0
percentageOutsideUfo: 50
itemSets:
-
- STR_PLASMA_PISTOL
- STR_PLASMA_PISTOL_CLIP
- STR_PLASMA_PISTOL_CLIP
- STR_MIND_PROBE
-
- STR_PLASMA_RIFLE
- STR_PLASMA_RIFLE_CLIP
- STR_PLASMA_RIFLE_CLIP
- STR_MIND_PROBE
-
- STR_HEAVY_PLASMA
- STR_HEAVY_PLASMA_CLIP
- STR_MIND_PROBE
width: 40
length: 40
height: 4
In your modded ruleset file, you only need to include what you're changing - here, the width and length of the map. So an example of that change might look like:
alienDeployments:
- type: STR_SMALL_SCOUT
width: 80
length: 80