Direct Permissions are assigned directly to the specific Object. Indirect Permissions are those assigned and inherited due to Role Assignment or due to Permissions assigned to an Object higher in the hierarchy (a parent item).
For example, if you navigate to the Folder Index page, select a Folder and assign Permissions to a Role or User, then those Permissions are “Direct” Permissions. Any items lower in hierarchy (Folders, Documents, and Placeholders inside that Folder) will receive "Indirect" or Inherited Permissions due to their inclusion in the Folder.
When viewing Permissions, Direct Permissions will be displayed as dark blue. Indirect (inherited) Permissions will be displayed as grey. Hovering over the tooltip will describe where the Permission is being inherited from.