A Magnetic Card Reader is an electronic device that reads information stored on a magnetic card. (A magnetic card is a plastic card that has some sort of magnetic object in it or a magnetic stripe on it. This card can store data.) A magnetic card can be read by either swiping the card through a Magnetic Card Reader or putting it beside a Magnetic Card Reader.
So basically, the Magnetic Card Reader reads the data that is stored in the Magnetic Card.
It might sound kind of complicated but it's really a common technology. To help you get a better picture of the technology, I am going to list some examples: credit cards, transportation cards (the ones where you put in credit and you just use it up), and Hotel Room Keys. So as you can see, it's a technology that is widely known and used though people don't really call it by the term "Magnetic Card/Reader."
Sources:
http://www.tech-faq.com/magnetic-card-reader.shtml
http://money.howstuffworks.com/personal-finance/debt-management/magnetic-stripe-credit-card.htm
http://mwolk.com/blog/magnetic-card-reader/
http://www.smarthome.com/743310/Magnetic-Card-Reader/p.aspx
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