It is the number of bits (bytes) in the key.
A 2-bit key has four values
00, 01, 10, 11 in its key space
A key of length “n” has a key space of 2^n distinct values.
E.g. the key is 128 bits
101010101010….10010101111111
There are 2^128 combinations
340 282 366 920 938 463 463 374 607 431 768 211 456