Squad power

It means how many points you can deploy in TB. Some events have power requirements. This was eventually abandoned and these days we just have very straightforward gear level/relic level requirements. 

It’s an extremely outdated metric that gives you a very basic measurement.  When the game first started there were fewer variables so it had value.  Now it really doesn’t serve much of a purpose.  Skill, team synergy, mod selection…those matter.   Think of it like this:  you have two people fighting each other.  One has a full auto assault rifle, the other a bolt action .22 rifle.  One appears more deadly on the surface but if you dig deeper is that really the case?  Maybe the first person is not a good shot, stands in the open and just pulls the trigger.  The second person is an expert marksman, firing from concealment and the .22 is equipped with a scope.  The raw power advantage of the first is negated by the skill and various other factors of the second.  Learn counters, pay attention to mods, understand kits and kill order…these are things that matter much more than GP numbers.

Think of it like this...

Power tells you it's "relative" strength when compared to other characters. 

But team synergy and game mechanics is like a game of rock-paper-scissors. "Rock" teams might be good defensive teams that can withstand offensive output like crazy, while slowly dishing out damage... easily winning against "Scissor" teams. "Scissor" teams might be teams that rely on Special attacks and their use of stuns/potency/etc... which can't defeat the tenacity driven "rock" teams but can easily defeat "Paper" teams. "Paper" teams are TM driven and high offensive output and can simply destroy whatever defenses "rock" teams have, but are prone to stuns, dazes, and other special attacks.

Is the power level of the "rock" team indicative of its strength if it goes up against a "paper" team of equal power? Or what about a "scissor" team?

It is a metric to say how complete your toon is. It takes your toons lvl, gear, ability and mods and gives it a value. It doesn't actually have anything to do with squad synergy.

It's more important to learn team synergy and counters. Check swgoh.gg for some ideas, go against teams and see how they work and try to find toons that counter them. Does the team do a lot of assisting or gain a lot of TM? Go for daze heavy teams, or teams that punish attacks out of turn like Traya.