The Rel="Canonical" element is part of the Link tag and is a newer and very important element which is used when there are multiple pages which can be created, normally in dynamic websites (e.g. those built in Cold Fusion, PHP or such sites as WordPress websites). Such dynamically generated sites can create multiple pages for the same content which can be flagged by Search Engines (especially Google’s Panda algorithm) As many dynamic sites include catalogs of products, content (such as articles or images) or other large sets of data, many of those items can be relevant to different categories.
This means that one item can be found in either multiple different categories so that a person can arrive on that page by navigating via multiple different routes. For example; you can navigate to a Ford Mustang Convertible on Ford’s website by navigating by “Mustang” or by “cars” as opposed to “trucks” or by cars which are “convertibles”. This means that there is a chance that you can have multiple pages for the same product as the URL will be different. The URL on dynamic websites is dynamically generated based on the data provided so that it depends on how you navigate to the end page.
A Canonical tag tells Search Engines that you there is one URL of the many duplicates that is the URL that they should use in their Search Engine Results Pages (SERPs). The canon URL is essentially the primary URL so by using the Canonical tag to define the primary page and URL which should be indexed for a particular item (e.g. product or article) then you avoid potential penalties for having duplicate content.
Optimizing your Canonical Tag:
If you are able to build out a specific URL for the products or content pages of your website then it is best to use the most Search Engine friendly and relevant URL that you can. This means creating a URL that includes the keywords that are most relevant to the page. If your page is about the 2015 Ford Mustang Convertible then you can have it appear thus: www.yoursite.com/2015-ford-mustang-convertible.
Once you have that URL created you can use URL redirects to send your duplicate pages to the one with the friendly URL or you can add a canonical tag to all of the duplicate pages that includes the friendly URL; such as this example provided by Google Support (see link below):