A Canonical URL basically refers to the authority or preferred URL that is associate to a particular site. It is the URL that the search engines pick up and rank for. To put this in lame man’s terms the canonical URL is the URL that you want people visiting, seeing, linking to and the search engines to rank.
You can read my entire blog post about canonical URLs here:
http://www.alaisterlow.com/canonical-url/
It is pretty indepth so it should give you a good understanding. The video by Matt Cutts is also really comprehensive.
Hope this helps
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