Telnet stands for Telecommunicaton Network. Telnet uses TCP Port 23.
Older equipment may not be able to support SSH so Telnet may be the only method of communication with that device.
Telnet provides for terminal emulation. It allows a user to login to devices remotely. It lets you connect to a server or router and run commands on that machine as if you were sitting in front of it. However, the communication is not encrypted like SSH. If you were to enter your username and password, this would be sent as clear text. This means that if anyone were to capture these packets on the network, they would be able to clearly see your username and password. Therefore, Telnet is not recommended for production systems due to this security flaw.