A Trackback is simply an acknowledgment. This acknowledgment is sent via a network signal (ping) from Site A (originator) to Site B (receptor). The receptor often publishes a link back to the originator indicating its worthiness.
Trackback requires both, Site A and Site B to be Trackback enabled in order to establish this communication. Trackback does not require for Site A to phisically link to Site B.

Trackback is as one of the technical part of the site. Trackback allows a person to let the other websites know that which sites have submitted link to their sites and also able to let you know when any site posted link to your site.

Trackbacks are a great way of letting another blogger know that you are referencing their work.
Trackbacks are also displayed in the comments section. This allows readers to easily find other blogs that have written on the same subject, thus it can provide some incoming traffic.