Tracks are shown on the map screen, and give you an idea of where other parties are. Rolling your mouse over them can tell you how large the party is, as well as a wealth of other information, depending on your skill level in tracking. Improving the tracking skill can help you see tracks from a further distance, how large the party that made them was, whether or not there were prisoners, how long ago the tracks were made, and even what the party was (caravans, farmers, bandits, etc.).
The tracks are colour coded and sized based on size and distance; a large arrow signifies a large force. A red one means it is very close by. Level 1 of the tracking skill only allows you to see white arrows that give no hint of the size of the force. Level 2 enables the player to now the age of the tracks, and 3 enables the colour coding of the arrows. Eventually, tracks allow you to know what party it was, its size, and if there were prisoners. Tracks are most useful for parties with large amounts of cavalry or for tracking large groups of infantry as it is easier to catch your prey if you're much faster.