A precedent is a legal term which has now become used in various aspects of life. It means something which has gone before and been accepted and therefore it should be accepted again. The first time a judge accepted a plea of insanity as being mitigating circumstances for murder and accepted that the murderer should receive a lesser sentence, then a precedent was set. So the next time a murderer was found to be insane, then the precedent would be cited to the judge as a reasonable course of action i.e. That he should administer a lesser sentence. In official circles i.e. Local government, police etc, the phrase is often used as a reason not to be lenient or let someone off. So the policeman will not waive a speeding ticket because it could set a precedent and then he would find it difficult not to let others off with a ticket. The term comes from the latin 'pre' meaning before and from the verb cedere meaning to go.
