A key table (keytab) file contains pairs of Kerberos principal identities and a corresponding encrypted key for that principal. It is as good as a password (and should be secured as such), and can be used to authenticate as one of the named principals against the Kerberos realm.
Keytabs are commonly used in instances where passwords are unsuitable; for example, where a host machine or automated process must authenticate to access a network resource. They also play an important rule in mutual authentication between a server and a client (especially in the server to client direction).
Concrete effect: Adding an entry to a keytab using
ktadd means adding an entry to the key table with a principal and an encryption key to facilitate the encryption & decryption of tickets generated in exchange with the KDC.
Abstract effect: Adding a principal means the keytab can be used by any entity in control of it (such as a host) to obtain a ticket as that principal.