Were originally developed by SixApart, creators of the MovableType blog package. SixApart has a good introduction to trackbacks:
In a nutshell, TrackBack 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:
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