The term Lady is used as an honorific for woman to indicate that they or their close relative has rank, often being a peer. The word originally referred to the mistress of a household. In modern England, a woman is called a Lady if she is a marchioness, countess, viscountess, baroness or baronetess, if their husband is a knight, baron or baronet or if their father is a duke, marquis or earl. It can also be used for the wife of the younger son of a marquis or earl.
Hence, you could refer to the Baroness of Outerkeep, Lady Catherine or the wife of Earl Snowdon can be referred to as Lady Snowdon.
A Lady of the SCA
In the SCA, it is the title given to a woman who has been given an Award of Arms. It is also commonplace to refer to any woman at an SCA event as "my lady" or "m'lady" but that implies no specific rank.