Nearly all a computers activity involves time whether logging a timestamp for when a network was accessed to sending an email, knowing the time is crucial for computer applications.
All computers have an on-board clock that provides time and date information. These Real Time Clock (RTC) chips are battery backed so that even when off they can maintain time, however these RTC chips are mass produced and cannot maintain accurate time and tend to drift.
For many applications this can be quite adequate, however if a computer is on a network and needs to talk to other machines, failing to be synchonised to the correct time can mean many time-sensitive transactions can not be completed and can even leave the network open to security threats.
All versions of Windows Server since 2000 have included a time synchronization facility, called Windows Time Service (w32time.exe), built into the operating system. This can be configured to operate as a network time server synchronizing all machines to a specific time source.
Windows Time Service uses a version of NTP (Network Time Protocol), normally a simplified version, of the Internet protocol which is designed to synchronise machines on a network, NTP is also the standard for which most computer networks across the global use to synchronise with.
Choosing the correct time source is vitally important. Most networks are synchronized to UTC (Coordinated Universal Time) source. UTC is a global standardized time based on atomic clocks which are the most accurate time sources.
UTC can be obtained over the Internet from such places as time.nist.gov (us Naval Observatory) or time.windows.com (Microsoft) but it must be noted that internet time sources can not be authenticated which can leave a system open to abuse and Microsoft and others advise using an external hardware source as a reference clock such as a specialized NTP server.
NTP servers receive their time source from either a specialist radio transmission from national physics laboratories which broadcast UTC time taken from an atomic clock source or by the GPS network which also relays UTC as a consequence of needing it to pin point locations.
NTP can maintain time over the public Internet to within 1/100th of a second (10 milliseconds) and can perform even better over LANs.