In a nutshell, the more links that point to a site, the more a site is going to be considered "popular". If 100 sites use the words "The Best SEO" and link said text to a website, a search engine is going to be in favor of listing that website for "The Best SEO" on the front of their index for that string of keywords. One must remember, however, that one can not simply rely on a "link farm" or link sharing site in order to get this done.

The sites that link to yours must be relevant, helpful sites all by themselves. The more "important" or "popular" sites that link to yours, the more important and popular yours will be as well. The best way to succeed in this area is to become a viable resource of information for internet surfers yourself. The more useful the information, the more other websites will naturally link to yours.