From Sermon 11:
http://www.imperial-library.info/content/morrowind-thirty-six-lessons-vivec
There's different interpretations, but I take that to refer to players being able to re-load the game if they die. In other words, "fate" (or the game's code) allows for the "ruling king" (you, the player) to redeem your deaths by reloading, a diagram back to the waking world.
Or, am I crazy?
I'd always liked to think of it as referencing all the Failed Incarnates. Each one had some kind of flaw that made them Nerevarine-but-just-not-quite, but each failure showed "What Not To Do" (or, just as importantly "Who Not to Be"), until one of the incarnations, your character, finally gets it "right" (I'm assuming that, if you complete the prophecies, your character actually
is Nerevar Reborn, or close enough for it to make no difference, since gods and mortals all seem content to line up behind it).
Or it could be a reloading thing, I guess. No worse than referencing the Teeth at the Edge of the World, if maybe a tad boring.