In the simplest definition, tracking helps fine tune your tapes speed during playback.
Tracking on your tape is important - this is what helps play your tapes safely and smoothly. Good tracking depends precisely on the distance between certain components of the tape and VCR - we're talking micrometers here - which is why most VCRs offered tracking adjustment to correct any error in playback quality.
Your tapes will degrade over time - that's inevitable. With tracking, the magnetic media within tapes will gradually lose their charge in a process called remanence decay. But this is just one of the many ways VHS tapes can fade over time, causing issues with their tracking abilities.