Backtracking is a fundamental mechanism in Prolog that allows the interpreter to explore multiple alternative solutions for a given query. It enables Prolog to perform an exhaustive search and find all possible solutions to a problem.

When a query is issued in Prolog, the interpreter attempts to match the query with the available facts and rules in the program's knowledge base. If a match is found, the interpreter proceeds to execute the corresponding body of the matched clause. However, if the interpreter encounters a choice point (a point where multiple alternatives exist), it records the current state and tries the next available alternative.

If the interpreter exhausts all the alternatives and fails to find a solution, it backtracks to the last choice point and explores the next alternative. This process continues until all possible solutions have been explored or until the interpreter backtracks to the very beginning, indicating that no more solutions exist. During backtracking, the interpreter undoes previous choices and bindings, effectively undoing the execution steps and returning to a previous state. This allows Prolog to explore alternative branches of the search tree and find multiple solutions.

Backtracking is essential in Prolog because it allows for non-deterministic programming. It means that Prolog programs can have multiple correct answers, and the interpreter can find them through backtracking. It provides flexibility in solving problems and allows programmers to explore different possibilities.