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Ray casting is the use of ray-surface intersection tests to solve a variety of problems in computer graphics. To do so you are figuratively shooting a ray in the scene and try to find all objects in its way, making it usefull for visibility checks and hit calculation, e.g. of bullets.

The easiest and fastest way is to just test for hits on AABB level, which however may lead to results, where the ray is only hitting the bounding box, without actually touching the geometry / mesh in the box. So the next step would be to perform another raycasting step for those hit boxes and check whether the ray is also touching the actual geometry on polygon level which will also tell you the excact hit position.

See also