First, I think "physical" is the wrong word- that is not quite what you mean. A mathematical formula does NOT HAVE a single "physical interpretation" and there is NO "physical" reason a formula should or should not be true.
Now, this may be what you are thinking of: If we take the nth power of a+ b, then each term will have "i" copies of a and "j" copies of b where i+ j= n- that is,
aibj. The coefficien of
aibj will be the number of different ways we can order "i" copies of a and "j" copies of b. For example
(a+b)2=a(a+b)+b(a+b)=aa+ab+ba+bb=a2+2ab+b2 and
(a+b)3=(a+b)(aa+ab+ba+bb)=a(aa+ab+ba+bb)+b(aa+ab+ba+bb)=aaa+aab+aba+abb+baa+bab+bba+bbb=aaa+(aab+aba+baa)+(abb+bab+bba)+bbb=a3+3a2b+3ab2+b3. That is as close to a "physical" reason for the coefficients as you will have.
So we have
(a+b)n=j=0∑n(ni)ajbn−j (the "binomial formula") and, in particular, taking a= -1, b= 1,
(−1+1)n=j=0∑n(nj)(−1)j(1)n−j=j=0∑n(nj)(−1)j.
But
(−1+1)n=0n=0 so
j=0∑n(nj)(−1)j=0.
Your sum is
not from 0 to n, it is from 1 to n so is missing the "0th" term which is
(−1)n. What that is depends upon whether n is even or odd.
For n odd,
(−1)n=−1 so
j=0∑n(nj)(−1)j=−1+j=1∑n(nj)(−1)j=0. Adding 1 to both sides,
j=1∑n(nj)(−1)j=1.
For n even,
(−1)n=1 so
j=0∑n(nj)(−1)j=1+j=1∑n(nj)(−1)j=0. Subtracting 1 from both sides,
j=1∑n(nj)(−1)j=−1.