Backlinks enable you to keep track of other pages on the web that link to your posts. For instance, suppose Alice writes a blog entry that Bob finds interesting. Bob then goes to his own blog and writes a post of his own about it, linking back to Alice's original post. Now Alice's post will automatically show that Bob has linked to it, and it will provide a short snippet of his text and a link to his post. What it all works out to is a way of expanding the comment feature such that related discussions on other sites can be included along with the regular comments on a post.
The backlinks setting can be found under the Settings | Comments tab, and consists of a single, simple option to turn it on or off:
Our default templates are already set up with the necessary code for backlinks. However, if you have a custom template, or one of our templates from before this feature was launched, you will need to add the code yourself. Instructions for that are here.