Positional tracking
3D tracking is the tracking of the position and orientation of an object in three-dimensional space.
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.
3D tracking can be done in three major categories: electromagnetic tracking, inertial, and optical.
Methods of 3D tracking include SLAM (or VIO).
History
In the 1990s, there was a frenzy about 3D tracking and it was used a lot for motion capture for 3D animated movies.
The 3DOF regime of cheap tracking was embraced by Oculus VR with the original Oculus Rift.
The 6DOF regime of cheap tracking has not yet begun.
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.