A circulation plan is a schematic empirical projection/model of how pedestrians and/or vehicles flow through a given area, like, for example, a neighborhood or a Central Business District (CBD). Circulation plans are used by city planners and other officials to manage and monitor traffic and pedestrian patterns in such a way that they might discover how to make future improvements to the system.
The two types of people most cognizant of circulation plans are developers and local city and county planning officials. New multi-family residential developments, for example, introduce increased volume (and thus density) of traffic flows into their vicinity. City planners might analyze this projected impact and justify charging higher impact fees. In other cases, local residents lobbying against a new development might use circulation plans to justify the denial of a development's building permit, citing decreased quality due to overcrowding, noise pollution, traffic, and so on.
Good city planners do their best to use main thoroughfares and so on to draw commuter traffic out of local neighborhoods (where excessive traffic is seen by local voters as undesirable) and onto larger roads, which often utilize considerable buffers like setback land and vegetation to divorce non-local (commuter) traffic from local (neighborhood) traffic.