Pareto Principle is also known as the 80-20 rule. In software testing this principle means that 80% of the found bugs are due to 20% of the modules in the application. In testing this principle is also known as defect clustering.
In practice these modules are either legacy ones or are modules written by many different people with inconsistent coding styles, resulting in a tightly-coupled and hard to maintain modules. Changing something in these modules have high probability on introducing new defects. If there are no safety gates in place to prevent this from happening - the quality of the application will decrease, as well the developer confidence.