When $f$ is a function from set $S$ to set $T$ the inverse of $f$ is a function $g$ from $T$ to $S$ such that each of $f$ and $g$ undoes the other: for every $s \in S$ you have $g(f(s)) = s$ and for every $t \in T$ you have $f(g(t))=t$. A function $f$ may or may not have an inverse. When it does, you can show it has only one, so you call it $f^{-1}$.
Your example is tricky in several ways. First, the domain $A$ is a set whose elements are themselves sets - it's the power set of $X = \{1,2,3,4\}$ . The function $f$ takes a subset $X$ of and produces another subset. So, for example, $f(\{1\}) = \{2,3,4\}$ .
Second, the codomain of $f$ is the same set as the domain, so the $S$ and $T$ in my first paragraph happen to be the same: #{1,2,3,4}$.
The third other potentially confusing thing in the example is that $f$ happens to be its own inverse. If you apply it twice you are back where you started.