what, exactly, does "story" mean?

I notice that in some films, they will have someone (or a team of people) being credited with the "story" or "screen story", and then there will be another person or team credited with actually writing the screenplay. Why is that so? Is it for legal reasons?
 
It can be variable. Theoretically it is the name of the person who devised the story but didn't format it for screenplay. In the case where there is "Story by", you will usually see "Screenplay by" in the credits. Otherwise, if the screenwriter devised the story themselves, you will see "Written by". Of course due to the politics of the industry, Hollywood films, and even some larger indie companies, don't use these in the strictest sense.
 
"Story by" generally means that someone wrote a treatment and sold it to a production company, who then hired a screenwriter to write the dialogue, ect., and that screenwriter gets the "screenplay by" credit. "Written by" means that the same person/people did both jobs.
 
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