Site access controls when an extension may read or change information on web pages.
On click limits access to when you activate it for the current page.
On specific sites limits it to chosen websites.
On all sites is broader. The available choices depend on the extension and browser.
Quick example
A coupon extension needs to inspect shopping pages. If it has all-site access, it may also be able to inspect pages unrelated to shopping. A narrower permission can reduce that reach if the extension still works.
What to do
Open Chrome's extension
Details, inspect
Site access and choose the narrowest setting that still lets the feature work. Test it afterward. A broad permission is a capability, not proof of abuse. Google's
extension-management guide explains the controls.
Practical distinction
Changing 'all sites' to 'on click' can reduce exposure while preserving the extension. Test its core function before removing a permission you rely on.