Through a lookup
The Reservation object has a lookup to the other object.
An example of this is the Resource object, to which Reservation has a lookup.
Via a junction object
The Reservation object is linked to the other object through a third object, which has lookups to both Reservation and the other object. This Salesforce knowledge article explains what a junction object is.
An example of this is the Contact object, which is linked to Reservation through the ReservationContact junction object. ReservationContact has a lookup to Reservation and to Contact.
For a more visual introduction to Dimensions and an example of how they work, please have a look at this video.
Here is another example (if you’re watching the embedded video below, scroll to 6min40):
Dimensions & Dimension Fields