The title tag is a HTML tag which is of special importance for SEO.
The title tag is required for each HTML file and is unique. It allows to display a title in the browser toolbar, provide a title for the page in SERPs and provides a title for the page in browser favorites.
The presence of a keyword matching a search query in the title tag is important for good ranking on SERPs. Logically, search engines consider that if a keyword or expression (several keywords) is present in the title of a webpage, it probably means that the page actually focuses on a topic related to the keyword.
Title tag is usually considered as the most important on page SEO element or criteria.
Title tag affects ranking on search engines, but it also affects click rate among search results on a page. Indeed, the title tag is used as title of results in SERPs and it is often the first element read by users. A good and concise title related to the query favors click rate on the SERPs.
Google gives some tips about managing title tag: