This is actually rather a tricky question to answer, because intertextuality has become one of those terms that is actually very wide in terms of its usage. Many many books have been written on this subject, and it is challenging to do this question justice in the space allowed, but a basic definition would be that intertextuality refers to the way that the meaning of a text is shaped by the meanings of other texts. This can refer to the way in which an author might borrow from another text and transform it, or a reader's studying a text with reference to another text. At its most basic level it could refer to a simple allusion or reference to another text.
If these seems a bit abstract, let me try and root this definition in something more concrete. The excellent book Wide Sargasso Sea by Jean Rhys is a perfect example of the value of intertextuality. This is a book that was written with intertextuality in mind, as it re-tells the story of one of the most neglected and maligned characters in Victorian literature, Bertha Mason, the mad wife of Mr. Rochester in Jane Eyre. Retelling such a famous classic but from the point of view of a character who is only objectified in the original demands a dialogue between the two texts, and only by reading the two books together can we understand how Rhys seeks to transform the original text and the meaning of the character of Bertha Mason in her re-write. Dialogue between the original text and the new text is crucial.
You also might like to think about intertextuality in the work of "The Love Song of J. Alfred Prufrock" and other Eliot poems. What do the many quotes and allusions add to his work?