Duplicate content or content that is accessible through multiple URLs has been haunting webmasters for a long period. After long discussions no definitive solution was found, in order to introduce canonical tag in search engines.
Google, Yahoo and Microsoft decided to unite in order to reduce duplicate content on the internet. This kind of tag allows you to specify your preferred version of a URL. This can confuse people. Here is an example that shows how duplicate content, especially on dynamic sites, may occur because a site might allow various sort orders for a page:

1. http://forums.digitalpoint.com/forumdisplay.php?f=5
2. http://forums.digitalpoint.com/forumdisplay.php?f=5&daysprune=-1&order=asc&sort=title
3. http://forums.digitalpoint.com/forumdisplay.php?f=5&daysprune=-1&order=desc&sort=lastpost

From this example we can see that the same link can be accessed through multiple links. This can affect the site and each page may not work properly.
In order to avoid it, you can add the tag from the following example:

<link rel=”canonical” href=”http://forums.digitalpoint.com/forumdisplay.php?f=5″ />

Google will understand that duplicates all are pointing to the canonical URL.
This tag will operate in a similar way to a 301 redirect for all URLs that display the page with this tag.