A Wallet Server is a catch-all configuration for rippled. With a Wallet Server, you can submit transactions to the XRP Ledger, access ledger history, and use the latest tools to integrate with XRP.
A Wallet Server will:
Connect to a network of peers
Relay cryptographically signed transactions
Maintain a local copy of the complete shared global ledger
Here is the PR to update the docs to include instructions on how to set up a Wallet Server