Email tracking allows you to see if the recipient received your email, viewed it (and how many times he actually opened it), and if he has clicked on the links included in the email. This way you may measure the engagement of your email campaigns and create relevant follow-ups.
What we actually do to provide all this data is insert a tiny image (a tracking pixel) into an email. As soon as the receiver opens the email, their provider makes a request to our server to retrieve this image.
This way we receive some information about the recipient, which we count as a "view". If the provider never request the tracking pixel data, the recipient hasn't opened the email yet.