It's not uncommon for two web pages with duplicate content to exist online. The reasons for this range from content theft, to redistribution or syndication of content, or even just accidental oversight. Utilizing the aforementioned HTML element to denote the proper 'canonical URL' tells Google and other search engines which URL is the ORIGINAL source and/or preferred version for Google to rank.
In other words, when two duplicate pages of content exist on different URLs, canonicalization allows you to select which of these web pages you want search engines to value as the original source, attributing 'credit' for that content to that specified URL and not the other.