The potential means that only characters who match the conditions within the potential block can get the trait randomly.
OR means that the entire block evaluates as TRUE/YES if any one condition is true. By listing all of those cultures, it means that any one of those cultures will allow the trait to appear randomly for that character. birth = 1000 means that it is practically guaranteed to be given to any character that passes the potential block on birth.
I highly recommend that you make this change to the traits as well, otherwise random humans might get the Orc trait on birth