If you say, for example, that silence reigns in a place or confusion reigns in a situation, you mean that the place is silent or the situation is confused.

When a king or queen reigns, he or she rules a country.

If you say that a person reigns in a situation or area, you mean that they are very powerful or successful.

Someone or something that reigns supreme is the most important or powerful element in a situation or period of time.

A reign of terror is a period during which there is a lot of violence and killing, especially by people who are in a position of power.