Mostly copy/pasted from WP. Need to be 'rewritten'
Trackback helps you to notify another author that you wrote something related to what he had written on his blog, even if you don't have an explicit link to his article. This improves the chances of the other author sitting up and noticing that you gave him credit for something, or that you improved upon something he wrote, or something similar. With pingback and trackback, blogs are interconnected. Think of them as the equivalents of acknowledgements and references at the end of an academic paper, or a chapter in a textbook.
Trackbacks were originally developed by SixApart
It was designed to provide a method of notification between websites: it is a method of person A saying to person B, "This is something you may be interested in." To do that, person A sends a TrackBack ping to person B.
A better explanation is this:
* Person A writes something on their blog.
* Person B wants to comment on Person A's blog, but wants her own readers to see what she had to say, and be able to comment on her own blog
* Person B posts on her own blog and sends a trackback to Person A's blog
* Person A's blog receives the trackback, and displays it as a comment to the original post. This comment contains a link to Person B's post
The idea here is that more people are introduced to the conversation (both Person A's and Person B's readers can follow links to the other's post), and that there is a level of authenticity to the trackback comments because they originated from another weblog. Unfortunately, there is no actual verification performed on the incoming trackback, and indeed they can even be faked.
Most trackbacks send to Person A only a small portion (called an "excerpt") of what Person B had to say. This is meant to act as a "teaser", letting Person A (and his readers) see some of what Person B had to say, and encouraging them all to click over to Person B's site to read the rest (and possibly comment).
Person B's trackback to Person A's blog generally gets posted along with all the comments. This means that Person A can edit the contents of the trackback on his own server, which means that the whole idea of "authenticity" isn't really solved. (Note: Person A can only edit the contents of the trackback on his own site. He cannot edit the post on Person B's site that sent the trackback.)
Take a look at the official trackback specification