What is ‘anchor text’ means?
Anchor text is a word or phrase that is used to link to an url.
For example:
<*a href=”http:*//.site.com/>My site<*/a>
(* added to disable hyperlinking)
In the above href link the ‘My site’ is the anchor text.

Why is it useful?
Many times search engines sees this anchor text tells what is going to be on the [...]