The meaning of third precept is that one's actions must never be motivated by desire of sensual pleasure.
The Pali text for third precept says:
Kāmesumicchācāra veramaṇī sikkhāpadaṃ samādiyāmi.
veramaṇī sikkhāpadaṃ samādiyāmi is a standard phrase that means "I undertake the training rule to abstain from ..."
The key therefore is
Kāmesumicchācāra, or, parsed out,
Kam-e-su is usually translated as "sexual" and
Miccha-cara as "misconduct". Such a translation, however, is severely misreading a simple literal phrase.
Miccha, the antonym of
samma, generally means "wrong", "low quality", "sloppy" and literally "opposite", "contrary".
Cara means "conduct", or literally "going about", "walking". So far so good.
Kama, the root of
kamesu, is often translated "lust" or "sensual pleasure" but its more precise meaning is fondness (combining such elements as love, desire, and taking pleasure in) for an object of material senses -- in other words "sensual fondness" -- not sexual but sensual!
The key to understanding this phrase though is
Kam-e-su, which gives it the meaning of "out of".
Together, the phrase reads "Misbehaving out of sensual fondness" (or "Going astray out of ..."). This gives it a very different meaning than "sexual misconduct".
The idea is, when one's mind is obsessed by an object of sensual pleasure, one's ability to reason about results and side-effects of one's acts gets severely impaired. One is then prone to making bad decisions, creating suffering for oneself and others. Instead, one should never act out of mere "sensual fondness"! One should act out of right understanding, out of compassion etc.
A natural question is, why did Buddha himself explained this rule by giving examples of crude sexual misconduct? The answer is simple: he was addressing lay audience!
The monks in Buddha's sangha, as is well known, were completely prohibited from engaging in sexual intercourse (see Vinaya). More than that, they were not even allowed to be in private with persons of opposite gender! Why would Buddha make "refraining from sexual misconduct" a training rule, one of the Five Precepts(!) if it was not even applicable to his monks? The answer is clear: because this rule had a different meaning for monks than it did for laity.
Indeed, in overall context of Buddha-Dharma, abstaining from letting one's sensual urges determine one's behavior makes a lot more sense as a training rule than abstaining from sexual misconduct, especially given absolute prohibition of sex in sangha.