general question ? what does the circled letter mean in every vehicle's number plate
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It is the series of the car. Every letter corresponds to a series and it goes on serially.
For example : KL 23 A 1247 is 1247th vehicle of the A series in the 23rd RTO circle of Kerala.
Once 9999 vehicles of A series has been registered, they move onto the B series.
Once they run out of 24 series (I and O are not included in series for possible confusion with 1 and 0(zero)), they move to AA, then AB and so on.
In your example: TN 96 ZX 5632
Tamil Nadu, 96th RTO circle, ZX series, 5632nd vehicle.
It is just a simple way of arranging vehicles into groups.
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