Telnet is a TCP/IP service, running on a computer, that let you log in to that machine remotely (from the network), and let you type text commands (cmd session) exactly like if you were physically put in front of that machine.
Usage is obvious: you can execute on your server whatever you want and see the results even if you are on the other side of the planet (given you have connectivity to that server).
The only restriction (as far as I know) is that Telnet is a text-only utility. You cannot see graphical output (like windows, pointers, etc.)
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