A reciprocal link is a mutual link between two objects, commonly between two websites in order to ensure mutual traffic. Example: Alice and Bob have websites. If Bob's website links to Alice's website, and Alice's website links to Bob's website, the websites are reciprocally linked.
Website owners often submit their sites to reciprocal link exchange directories in order to achieve higher rankings in the search engines.
Reciprocal linking between websites became an important part of the search engine optimisation process thanks to the link popularity algorithm PageRank employed by Google, which ranks websites for relevancy dependent on the number of links that led to a particular page and the anchor text of the link.