A backspace is a keyboard stroke that moves your cursor backwards. When you type the wrong word in an email, you can use the backspace to go back and change it.
You can use the word backspace for the keyboard key itself, and also to mean "hit the backspace." If you're helping a friend edit an essay on her laptop, you might say, "Backspace to that first paragraph so I can read it again." The word's been around since the late 19th century, when it referred to typewriters — the backspace was the latest in new technology in 1899.