Terreiro refers to a farmyard or backyard, often a dirt or unpaved area around a rural house. It evokes a strong sense of rustic, country living.
In the song, it sets the scene immediately: "Um galo cantando no terreiro" (A rooster crowing in the farmyard). This word is interesting because it's specific to a rural context and paints a vivid picture of the simple, interior life celebrated in the lyrics, making it unique compared to more common words for 'yard' or 'patio'.
Coisas do Interior is a warm look at life in the Brazilian countryside, told by someone who has no wish to trade it for the city.
The verses build the picture out of small, ordinary details. A rooster crows in the yard to announce that the day has broken. The voice of a violeiro, a player of the ten string viola caipira used in Brazilian country music, comes over the radio singing his own love stories. There is little vanity this far from town, and a heart that carries no pain. Nothing dramatic happens, and that is rather the point.
The chorus turns those details into a quiet argument. They will never understand how happy we are, living in a simple little house out in the woods. Only the people who have lived it can tell you what it is really like.
Ze Vaqueiro closes the song with his own tag, "O original", the line he uses to sign his records.