Of the Etag Header Wikipedia says:
An ETag (entity tag) is an HTTP response header returned by an HTTP/1.1 compliant web server used to determine change in content at a given URL. When a new HTTP response contains the same ETag as an older HTTP response, the contents are considered to be the same without further downloading. The header is useful for intermediary devices that perform caching, as well as for client web browsers that cache results. One method of generating the ETag is based on the last modified time of the file and the size of the file, another is using a checksum.

In TiddlyWeb an ETag header is produced when retrieving one or a collection of tiddlers. That ETag is then used to do cache-validation or edit conflict handling. More details of how this works can be found in the HTTP specification.