In class peer review means you, and other students in your class, providing feedback to your fellow students on their drafts of various papers.
Peer review as it relates to scholarly sources is something different. Scholarly peer review is part of the process of scholarly publication. When a scholar who has conducted his or her own research wants to convey that research in a published paper, he or she must first submit a draft of the paper to several other experts (people with PhDs) in that same field. Those peer reviewers are looking to see that the research question, the literature review, the study’s methodology and the author’s conclusions are sound and reasonable. If so, the peer reviewers will approve the paper for publication.