20/20 is basically defined as you can see at 20 feet what a "normal person" can see at 20 feet. 20/40 means you can see at 20 ft what a "normal person" would see at 40 ft.
If we get more in depth, 20/20 vision is actually talking about the resolution of the human eye, the 20/20 E famous on the snellen eye charts are actually very specifically sized such that each black line or white space in between is 1 arcmin of angle subtended from your eye. Therefore, resolving a 20/20 E lets you know that you can see 1 arcmin of resolution. 20/40 essentially means that the resolution you can see is 2 arcmin (smaller resolution is better).
In reality, our limit coming from the size of the rods and cones should be closer to 20/10.
Believe it or not, our eyes actually have quite a lot of optical aberrations, some (like astigmatism/defocus) which can be easily corrected with contacts or glasses, but others cannot. These difficult to correct aberrations can be known as higher order Aberrations (HOAs), which are usually relatively low compared to defocus and the larger lower order aberrations that can be corrected. For the most part, HOA really don't affect our vision that much and lots are image processed out by your brain so you don't really notice them, yet these with some parts of the uncorrected lower order aberrations make it so you are unable to reach 20/10 vision.
With an adaptive optics system, we are able to measure the wavefront aberration in your eye in real time and correct it with a deformable mirror which changes thousands of times a second to correct the wavefront. This effectively removes all the aberrations in your eye giving you almost perfect vision (~.01 microns rms) which enables people to see with 20/10 vision.
It is not called 100% vision because 100%, 90% ect vision would not really fit what is being measured. having "fully 100% vision" doesn't really tell you what the resolution is, while 20/20, 20/40 ect does.
Going into stronger detail, the term 20/20 is a measure of visual acuity. This notation is now only used in North America, while Australia and New Zealand uses a 6/6 notation.
These figures are based on letter charts which are used in the standard sight test, such as the Snellen chart. The top number refers to the distance at which the chart is viewed - 20 feet (or 6 metres) - and the bottom number refers to the distance at which a person with ideal vision can see a letter clearly. Thus if you have 20/40 (or 6/12) vision then you will just be able to see something from a distance of 20 feet that a person with perfect eyesight will be able to see from 40 feet.