What is Correlation in context of BizTalk Server?

Answer:

An Orchestration can have more than one instance running simultaneously. Even though each of those multiple instances perform the same action, it does it on different data contained within a message.

Correlation is a process of associating an incoming message with the appropriate instance of an orchestration.

For Example: If your orchestration issues a purchase order, receives an invoice, and sends a payment, the developer must make certain that the invoice message is received by the orchestration instance which corresponds to the orchestration that sent the Purchase Order. Without correlation, it would be possible to send out an invoice for thousands of items even though the purchase order is for one. And each correlation is based on a set of properties known as correlation types.