It is a classifier for people, people that has higher level than you or older than you, and to address someone that you don't know in a formal way. Example 那位人 that person 两位 / 两位人 2 person
But we also can use 个 in general way. 那个人 is also 'that person' 两个人 is also '2 person' but they are less formal.
I'm not a native Chinese speaker (I'm probably intermediate), but my feeling is that 两位 makes this feel more contextually like asking for a table for two at a place like a restaurant. If you ask a Chinese speaker how to say "two people", I feel they'd be more likely to say "两个人". Do others share my sentiment?