Getting the model to work through a problem step by step before giving its answer, rather than jumping straight to a conclusion. It improves accuracy noticeably on anything involving reasoning, arithmetic or multiple stages, for much the same reason that showing your working helps a person avoid careless mistakes.
Technical view
Intermediate reasoning tokens give the model more computation to allocate to a problem and let it condition on its own partial results. An important caveat is that the stated reasoning is not a reliable account of the underlying process: models can produce plausible reasoning that does not correspond to how the answer was actually reached, so a chain of thought should not be treated as an audit trail.
Related
Part of AI Terminology Index, section: Controlling and Extending Behaviour at Run Time.