Okay, let's play a game! Have you ever traced around an object with a crayon or a pencil? Image tracing is kind of like that, except instead of tracing with a crayon, a computer traces around a picture to make a new, digital version of it.
Here's how it works: Imagine you have a picture of a dog on a piece of paper. To trace it, you would take another piece of paper and put it over the picture. Then you would take a crayon or pencil and very carefully trace around the dog, making sure to follow all the bumps and curves.
With computer image tracing, a program called a "vectorization tool" takes the place of the crayon. The tool looks at the picture and "traces" a digital line around the edges of all the shapes and colors it sees. Then, it can turn that traced image into its own digital file that can be edited and manipulated just like any other computer file.
People use image tracing for all kinds of things. For example, an artist might use it to create a digital version of a hand-drawn sketch. Or a graphic designer might use it to make a logo or icon that needs to be very crisp and clean.
So, in summary: Image tracing is like tracing around a picture with a computer, and it's used to make digital versions of things like sketches, logos, and icons. Cool, huh?