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A police officer was directing (the) traffic. (Oxford Dictionary)
This is one of example sentences under
4 [transitive] direct someone (to…) to tell or show someone how to get to somewhere or where to go
but does the sentence mean that the police officer was telling the way to go somewhere to the drivers or is it more like the police officer standing at the center of an intersection and acting like a traffic signal?
It technically means both.
If a cop is acting like a traffic signal, telling you it's your turn to go through the intersection, and you don't listen to him, you can guess what might happen next.
So a cop is telling the driver which way to go, as in that way or this way. But also can act like a traffic signal in saying to not go anywhere (to stop).
If you're asking like specific directions, like how to get to the mall, no a cop doesn't usually give out directions like that. However, officers may be hired/working for a special event in which they help direct those authorized into some parking lots, and inform other drivers where they should go to park. For example, a sporting event or concert.
