Background is where you fill us in on your character's story, though you don't have to. What brought your character to the here and now, as a powerful combatant? Characters tend to be easier to RP with when they have a background to feed from.
Additionally, in this form, you should mention any major material posessions the character has -- whether it's vast amounts of money, a huge house, a spaceship, or what have you. If you fail to mention it here (or in some other part of the form), we may deny you any developments later on that depend on your character's posessions, or we may ask that you not RP your character as owning those things.