Communication is a two-way street. A word becomes meaningful when the recipient is able to understand the author through it; if there is no such consensus, then the word can't be said to mean anything.
Here’s a concrete example: “citizen” meant something completely different 100 years ago. At that time it meant “member of the set of landowners”, which resolved to “white male landowner”. Now the concept of citizen is much different and a lot more contentious.
Right, and _both parties agree to the current definition_. That's the entire point.