From Tapestries MUCK
Rooms in a MUCK are stored in a tree like structure that is not unlike a directory tree. Rooms serve both the place of directories and files (leaf nodes) in this tree. The room directly above the one you are in is considered it's parent room.
The reason for this is that Mucks search from your current room down the parent rooms back to the top of the tree, room #0 for various resource. This lets them 'inherit' some things. This is true of some types of properties, and more important, exits. The global commands in a Muck that are not built in are normally just actions on room #0, and thus inherited by the entire Muck.
There are other uses for this tree. For example, LocationCount (lc) takes a point in the tree and measures everything "under" it to determine how many people are in a area. The Zone flag on a parent room (which is set on the top parent room in public building and other places) restricts linking to just things contained under that parent unless the exits are wizard approved. (This is for the enforcement of topology.)
To move a room in the tree, you simply @tel #roomdbref=#parentroomdbref. Assuming you have permission, and this would not cause a loop, it will re-parent the room to the parent room.
It is considered good practice not to use a parent room as a normal room in most situations.