RTC means RealTimeClock. It is a circuit of real time. Although arduino processor count the time for itself, it has two disadvantages. First is that arduino timer is not very precise and already on 24 hour cycle it can reach deviation of minute scale. This highly depends on routine runs on concrete processor. The second one is that the arduino timer nulls and arduino forget the time after switching off or reboot. The solution is in use of RTC integrated circuits because there usually battery in circuit.
It needs a crystal, capacitors, two resitors and optinal battery for fully function. With arduino it communicate by I²C protocol.
Source of picture and tutorial for connection to arduino. Also the code can be found there.