Taunt is a form of Crowd Control in Diablo II and Diablo III, used by Barbarians, Crusaders and Kormac. The general idea is forcing the enemy to attack the designated target, usually the caster, for a short time.
While this effect may seem unimportant and even useless (if not suicidal), it is actually vital for crowd control in groups of two or more players. Barbarians and Crusaders are generally much tougher than other classes, and can easily take several hits without much risk, while giving their glass-cannon allies time to safely attack from distance, without distractions and interruptions. In addition, Taunt also forces the target to remain in melee combat, effectively preventing the enemy from escaping.
Taunt is especially effective against ranged attackers, for they are forced to engage in melee combat too.
In single player game, Taunt can be used to get the enemy attention away from hirelings and followers (or, on the contrary, away from the player and towards Kormac the Templar), while preventing fast enemies from retreating.
A Taunted enemy will immediately stop all current actions, reset its targeting priorities and attack the designated target as it can. While the effect lasts, the enemy may not switch to another target, unless the Taunt effect is overridden by another Taunt. The enemy will try to approach the target in melee range, if possible (and if they have any melee weapons at all). However, Taunt does not prevent the enemy from using special abilities and ranged attacks, though these will always be directed at the target if possible.
There is also a Lure effect of similar functionality, as it forces the enemy to move to targeted location, ignoring other priorities. This is considered Taunt as well, although it is mostly used to force the enemy to move into the area of effect damage location, or a trap.
Crowd Control resistance reduces the duration of subsequent Taunts and Lures.