Retouching is the process of getting an image ready for final presentation. This can take a variety of techniques and process, can be very subtle or dramatic but every image that you see used in advertising will be subjected to some form of enhancement, even the Real Beauty campaigns from Dove/Unilever will have undergone some retouching or digital enhancement such as dust removal and sharpening.
But retouching in a sense has been around since the very beginning of photography. Before digital photography became the norm, retouching occurred in the dark room with over and under exposure, dodging and blurring, masking and split-toning. The main difference these days is that anyone can enhance their photography be it using ready made filters found in apps such as instagram and hipstamatic or on their computer using programs such as Adobe Photoshop.