What is Canonical tag?

Also called rel=canonical.

A canonical tag tells search engines which address is the real one for a page, when the same content is reachable at several URLs. It stops your own pages competing with each other.

In more detail

Duplicates arise without anyone creating them: with and without www, with and without a trailing slash, with tracking parameters appended, or the same product under several category paths. Each is a separate URL to a crawler. The canonical tag nominates one, and the ranking signals from the others consolidate onto it.

Why it matters for your site

Without it, links pointing at four versions of a page are counted as four weak pages rather than one strong one. On stores this is the single most common technical SEO problem, and it is entirely invisible from the front end.