what is the meaning of lexicographically smallest string code example

Example: what is lexicographically smallest string

Input: A = "hello", B = "world", S = "hold"
Output: "hdld"
Explanation:  Based on the equivalency information in A and B, we can group their characters as [h,w], [d,e,o], [l,r]. So only the second letter 'o' in S is changed to 'd', the answer is "hdld".