It's software used to create music. Typically you build sections that you loop and intermingle. It's kind of like writing small sections of sheet music for multiple instruments at a time, but unlike many Midi composers, the notes aren't shown as notes. It's basically what came after manually programming all the chiptunes as part of the game's code. Instead using general parsing of a format that described the audio in terms of pitch, volume, dropoff, echo, etc. of samples (at least samples were usually used with later trackers anyway).

A 'tracker' is a usually-sample-based music making software. AFAIK they were originally developed by demoscene groups (concurrently to game studios that used the code privately whereas the demogroups would release binaries for others to use for music-making with few limitations) These 'sample mixing engines' were developed in order to be able to add music to their productions (demos and games), and it became it's own whole-world. Fully agree with sibling comments, module trackers can be huge fun! Near zero barriers-to-entry.. and there's still some great stuff being made in this format too!