Graphite is a form of carbon, and leaves a shiny metallic grey color on a surface when moved across it. It can be removed with an eraser.
The most common form of graphite an artist will encounter is the "lead" inside a pencil, compressed and baked to varying degrees ofhardness. You can also buy it in powder form, like you would paintpigment. It works the same as graphite in pencil form, in that you can build up tones with it and remove it with an eraser. Apply it with a brush (but, as with all art materials, be careful of inhaling dust!)
Graphite has been used since the sixteenth century, when it was discovered in the Lake district in England. According to legend, in the early 1500s a tree was blown over in a storm in the Borrowdale region of Cumberland. Underneath its roots an unfamiliar soft, black rock was found, graphite. Local farmers started using it to mark their sheep. From this other uses grew, and a cottage industry developed making pencils. The UK's first pencil factory was established in the region in 1832, becoming the Cumberland Pencil Company in 1916, which is still in existence today, selling the famous Derwent brand.