Positional tracking
3D tracking is the tracking of an object's position and orientation in a three-dimensional space.
3D tracking can be done in a few different ways, including electromagnetic tracking, inertial tracking, and optical tracking, also known as camera-based tracking.
It is also known as six degree of freedom tracking, for the six total degrees of freedom: three of rotation and three position.
In general, tracking is either 3DOF tracking or 6DOF tracking.
History
3D tracking has been used for motion capture for 3D animated movies.
The 3DOF regime of cheap tracking was embraced by Oculus VR with the original Oculus Rift.
Methods
Electromagnetic tracking requires an external source. It also does not work reliably in the presence of metallic objects, like a metal water bottle or laptop computer. A metallic object has to be at least a foot or two away from the tracking area so it doesn't interfere. Metallic objects cause jitter and drift.
Magnetic tracking is typically wired, but it does not have to be.