THe point of it shows the relationship between people and generations.
For instance: Luthien and Earwen are first cousins; their children (Dior and Galadriel) would be second cousins to each other. But, Dior and Galadriel could also be called 'first cousin, once removed (cuz of generation)' from either Earwen or Luthien, as the case may be.
The term 'cousin' show the relationship and is used without the 'removed' adjective when the cousins are in the same generation. The term 'x-removed' is used to show the relationship between different generations.
Hope this helps!
Your turn, Thorongil.