Pagerank is simply a general indicator of how many links and the quality of those links.
No it doesn't mean you'll rank higher than ALL keywords. It does take into account a lot of things like keyword density, anchor text of the incoming link etc, and while it does not judge the quality of your content, GOogle will try to interprete what your page is about to determine relevancy, and through a complex algorithm, come up with the search result.
So while it is not all encompassing across keywords - it is a very good general indicator on where your page will end up in a search result -all things being equal
Google PageRank, What Do We Know About It?