As the name suggests Privileged docs option under Document manager plug-in helps to create privileged folder, where we have an option to add members with 'Upload' privilege while creating the folder. And those people can upload files/documents to the specific folder in addition with accessing the documents within the folder.
Go to Collaboration->Documents.
Click on ‘Privileged docs’ in the ‘Create’ drop-down.
Provide folder name, add members with "upload privilege" by selecting department and click on submit button.