Tracing an image in Photoshop is a technique used to create a vector graphic from a raster image. A vector graphic is made up of mathematical curves and lines, which makes it infinitely scalable without losing quality. A raster image, on the other hand, is made up of pixels, which can become distorted or blurry when enlarged.
Tracing an image can be useful for a variety of purposes, such as creating logos, illustrations, or website graphics. It can also be used to convert hand-drawn sketches into digital files.