It represents the estimated chance of it appearing, so how common it is. Granted, a percentage is more accurate, but for now the pie charts are what we have.
Three-quarters green is 75%. Half green is 50%. One-quarter green is 25%. An all-grey circle means the Pokémon is interactive, or has an overworked sprite. Please remember that these are rough approximations of how often the Pokémon appears. Think of it as common-uncommon-rare.