[Dovecot] authorizing users

Im trying to clarify if I understand correctly about authorizing users.

"The simplest login method is sending the user login info in plain text and allowing access only to users that already have UNIX access (ie. in /etc/passwd) to the machine dovecot is running on."

Im using fetchmail postfix dovecot on my own personal computer to get my mail from two servers. What Im wanting to understand is, is this saying that since I am already a user on my own system, that by using /etc/passwd that I would use my username and password in say thunderbird to login to dovecot to get my mail?