Google Analytics - User Defined Values

I am trying to grasp “User Defined Value” in GA.

This is my results after a 5 hour adwords run:

How does google define these values to each user. Is that what the user typed in the google search bar in order for my ad to appear?

Number 8. “horse name tags for stalls made of wood”

My thinking is “name tags” triggered my adwords ad to appear “horse name tags for stalls made of wood” he/she clicked my ad and thats how google defined that user?