Canonicalisation in SEO selecting one url to be considered by the search engines from a number of urls which contain the same or similar content. Without a canonical tag pointing to the "real" url, all the urls would be considered as duplicate content and would compete against each other for consideration making it harder to rank.
If an artisan biscuit manufacturer has a product page for chocolate bourbons on their website which they encourage affiliates to promote on their websites too, the search engines have no easy way of knowing which page they should consider for ranking. However, with a canonical tag pointing to the original artisan biscuit manufacturer's page, the search engines know which page is the "real" page. What's more – the link juice from the non-canonical pages will be likely to be passed on to the original.
In the head section of both the original page (http://www.original.com/) and the alternative versions put the following line of code:
<link rel="canonical" href="http://www.original.com/">
If you have duplicate content issues on your own domain it's pretty simple to implement canonical tagging. However, if you've shared content with your affiliates and the duplicate content spreads to various places around the web, it can be hard to get everyone to play along with canonicals.
In this case it's a good idea to differentiate the content on your site from the others and make it ten times better than the previous pages.