Merge tracking is a facility offered by some version control systems. It is the ability of a version control system to "remember" which changes have been merged from one line (branch) of development to another and act accordingly. Without merge tracking it is the responsibility of the user of the system to manually record which changes have been previously merged and act appropriately (for example, by not attempting to merge the same change twice).
In all but the simplest cases of merging merge tracking is a significant time saver and a real convenience which encourages developers to use branches in ways that improve their productivity and the quality of their work. A lack of merge tracking can actually be a disincentive to branch at all, and for those that choose to branch anyway it can be a significant drain on their time.
Examples of systems which offer automatic merge tracking are SVK (free) and Perforce (commercial); compare this with Subversion which does not offer merge tracking at this point in time (March 2007, Subversion 1.43 is the current version). Subversion 1.5 will offer initial support for merge tracking and the
merge-tracking branch was merged into the trunk on 22 March 2007. More information can be read here.