what does -x mean in if conditional statement?

From the man bash pages (especially the CONDITIONAL EXPRESSIONS section):

   -a file
          True if file exists.
   -b file
          True if file exists and is a block special file.
   -c file
          True if file exists and is a character special file.
   -d file
          True if file exists and is a directory.
   -e file
          True if file exists.
   -f file
          True if file exists and is a regular file.
   -g file
          True if file exists and is set-group-id.
   -h file
          True if file exists and is a symbolic link.
   -k file
          True if file exists and its ``sticky'' bit is set.
   -p file
          True if file exists and is a named pipe (FIFO).
   -r file
          True if file exists and is readable.
   -s file
          True if file exists and has a size greater than zero.
   -t fd  True if file descriptor fd is open and refers to a terminal.
   -u file
          True if file exists and its set-user-id bit is set.
   -w file
          True if file exists and is writable.
   -x file
          True if file exists and is executable.

   [...]

if itself is a shell keyword, so you can find information about it with help if. if itself only branches based on whether the next command returns true ( 0 ) or false ( not zero ). What you really want though, is man [ or man test, where [ is an alias for test. That statement is actually executing test -x /etc/rc.local, which tests to see if that file exists and is executable (or has search permission).

From info test :

`-x FILE'
    True if FILE exists and execute permission is granted (or search permission, if it is a directory).

Execute permission is needed on a directory to be able to cd into it (that is, to make some directory your current working directory).

Execute is needed on a directory to access the "inode" information of the files within. You need this to search a directory to read the inodes of the files within. For this reason the execute permission on a directory is often called search permission instead.