’OnManagerAuthentication’ is invoked so that plugins can do custom authentication (via LDAP, or something else). So you would create a new plugin, put your authentication code in there, and check the ’OnManagerAuthentication’ box in the "System Events" tab.
The default installation has no OnManagerAuthentication Overrides, so false is returned, then MODx kicks in to local authentication via it’s own user tables.
So if you create a plugin that returns true to OnManagerAuthentication, you are allowing that user to login.
EDIT: I am working on documenting all the MODx system events, you can take a look
here, I currently don’t have any info on the ’OnManagerAuthentication’ event, but this post is a good start if you wanna help out