Target tracking is a ship and guns statistic that helps negate accuracy penalties from your ship's movement and the relative movement of the target.
Official Definition[]
From Taelorn on the forums:[1]
Target Tracking - This is a stat that appears on guns and on ships. Target tracking helps negate the penalties suffered by movement, but it can never provide a bonus to accuracy. Each point of target tracking equates to 1% accuracy unless your tracking is higher than the cumulative penalties.
Penalties[]
To fully understand the effect target tracking gives, it is necessary to understand the penalties it nullifies.
Your Ship's Movement Penalty[]
When your ship is moving, it accrues an accuracy penalty to its weapons. For each 1 knot of speed, all ship weapons suffer -2% to their accuracy.
Target's Relative Motion[]
When a target you're firing at is moving in a different direction than your ship, it becomes harder to hit the more it's moving compared to your current heading. For every degree/second of separation, there is a -6% modifier to accuracy.
In other words, a ship that's sailing alongside (parallel to) you at the same speed is much easier to hit than a ship passing your broadside at full speed in the opposite direction.
Target Tracking Negation[]
The target tracking statistic will negate as much of these two penalties as possible (but never provide a bonus).
So if you have a ship with a Target Tracking of 24, you could be going as fast as 12 knots and suffer no penalty. (Assuming your target is moving the exact same direction and speed, 12 knots = -24% accuracy, which is offset by 24 Target Tracking). Or if you're stationary, and a ship you're firing at is moving (relative to you) 4 degrees per second, you would still incur no accuracy penalty with a target tracking of 24. (Relative target movement of 4 degrees per second = -24% accuracy, which is offset by 24 Target Tracking.)
Target Tracking will never provide a bonus to your accuracy aside from negating these two penalties. So if you're in a ship that's not moving and your target is not moving, your target tracking statistic is not helping in any way.