Win32s is an API for Windows 3.1 and 3.11 which allows 32-bit programs to call 16-bit hardware devices. The idea was using a n API so that a driver could map the calls into the device and then pass the results back.
Basically Wind32s is a set of DLL libraries with a VxD driver. The game Freecell is bundled with Win32s.
With Windows 3.1, the hard disk still was using MS-DOS which is 16-bit. The ISA slots are 8-bit with 16-bit extensions. The new PCI slot however was 32-bit which made Win32s a needed interface.
Win32s comes from the development seen with Windows NT that Microsoft was working on for the next generation workstations.
NB: The Win32s upgrade appnote, Pw1118.exe was last updated on February 22, 1996