ACT test scores are designed to show what students have learned throughout high school and provide colleges and universities with information for recruiting, advising, placement, and retention.
What do they reflect - They paint a picture of some key skill areas that students need outside of the classroom: content knowledge, time management, plan execution, management of emotions under pressure.
Studies have shown a relationship between ACT scores and the probability of earning a degree. The probability of a student earning a 3.0 or greater in college coming in with an ACT score of 30 is roughly 2-3x greater than if they enter college with an ACT score of 15.
These test scores serve as a link between what students have learned and what they are ready to learn next. Overall, their intent is to measure college readiness, not aptitude.
What they don't tell us - How smart a student is or what potential they have. They don't predict success at the collegiate level beyond the first year. They don't necessarily reflect student IQ.
Getting into "better" schools as a result of your ACT score may increase career opportunities down the road, however the ACT is not a true predictor of any sort of career success.
They are not designed to measure overall intelligence as scores can be improved through preparation. Yes innate intelligence plays a role, but scores can be affected by a variety of factors outside of cognitive ability.