A master shot is a full movie scene that captures all action/dialogue and is typically the composed as the widest and longest shot. This is crucial for the editing process as this is the scene to which all coverage shots (close-ups, cutaways, medium shots) are referenced and synchronized to.
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The master shot helps to introduce the environment where the scene is set. After that I try not to use it; the master shot is usually only there if the other footage does does not work because close up shots can reveal too much information and make the shot look too real (i.e. the close up of the actress looks ugly,) or too dramatic (the acting was slightly iffy, etc), sometimes it’s unavoidable. The master shot and over the shoulder shots can save the editor and the scene, but it does mean the actors do need to know most of their lines.