An excellent question! An obstructed balcony on a Princess Cruise (and most other cruise lines) is a stateroom with a private balcony that has its view partially or significantly blocked by a ship’s structure.
The key point is that you still get the open-air balcony space with chairs and a table, but the “view” component is compromised.
On Princess ships, the obstruction is almost always caused by the lifeboats (and their davits/launching equipment), which are typically positioned on Deck 8 (Emerald Deck) on Grand-class and similar ships. The obstruction can vary greatly from cabin to cabin.
Princess categorizes these cabins, usually from “Obstructed” to “Fully Obstructed,” and prices them accordingly. The view can range from: