Backstab is a thief skill where you sneak up on your opponent and stab them in the back with a dagger or other piercing weapon. After backstabbing, the attacker is lagged for a short time.
Note that backstab is not totally effective on many creatures. Skeletal creatures are nearly immune, while creatures that are injured are generally much more aware and harder to sneak up on.
Dexterity will help you to make your backstab more often, and low dexterity can hinder your backstab considerably.