16" refers to the length of the slide when closed, which will usually also be the depth of the drawer you're installing them on. Your cabinet (or whatever you're installing in) would need to be at least 16" deep, plus the thickness of any false front you may have on the drawer if you want to make them flush.
It's also a nominal length--I just bought these exact slides and they actually measure 16 1/16" long. This little bit of extra length shouldn't be a problem since you should be leaving yourself at least 1/4" extra depth anyway.
"Full extension" tells you that you can pull the drawer out as far as the slide is long: 16". Slides also commonly come in 3/4 extension (which would mean 12" of extension in this case), or 1" over-travel (17").