The problem difficulty rating is done automatically(something along the lines:It's given an ELO rating as if the problem were a human player. If you solve the problem, the problem lost. If you failed the problem, the problem won.) The problem ELO is displayed after solving a problem in Tactics ELO (below Average Time). The "Average rating" of the stars is about the quality of the problem.
I would say
1 star means the problem is bugged/very annoying.
2 stars You don't like it.
3 stars OK
4 stars is a nice problem.
5 stars is a very nice problem.