Answer:
The phrase "Crete was important as a demonstration that German power was not landlocked" refers to the importance of the island of Crete in World War II as a proving ground for Nazi Germany's ambitions. The capture of Crete by German and Italian forces in 1941 was an impressive display of their military prowess, showing that their power did not end at the continent's boundaries and could reach across the sea. This victory also served as a strong warning to the Allied powers, demonstrating Germany's ability to project strength despite its relative lack of naval power.