AllowedIPs defines any IP ranges for which the device will be routing or passing traffic for. Client devices like laptops and phones will generally only have one or two IPs, being an IPv4 and IPv6 address of the client. On router nodes/bounce boxes this should be the subnets for which the router/bounce node will handle. It can be used more than once in the config file. You can specify multiple by using commas to separate the values, or you can just add multiple lines of AllowedIps. Similar to other routing engines it will prefer shortest length paths first, so if you have 220.127.116.11/32, 18.104.22.168/24, and 0.0.0.0/0 it will always pick 22.214.171.124/32 first.
peer is a router for other peers AllowedIPs = 192.0.2.1/24, 2601:2601::/48 peer is a relay server that routes to itself and all nodes on its local interface AllowedIPs = 192.0.2.3/32,192.168.1.1/24 peer is a relay devices that routes to itself and only one other peer AllowedIPs = 192.0.2.3/32,192.0.2.4/32 peer is a routing server that bounces all internet & VPN traffic (similar to commercial VPNs) AllowedIPs = 0.0.0.0/0,::/0 peer is a client device that only does traffic for itself. AllowedIPs = 192.0.2.3/32, 2601:2601:c::3/128