A forklift works by having a part that lifts the load and a part the holds the forklift down.
The mast does the work of raising and lowering what is being moved by the forklift. Attached to the mast are forks or other attachments. Usually the mast is hydraulically operated. Sometimes it is chain operated.
The counterweight is what holds the forklift down while it performs it's lifting and lowering of the load. This is attached to the rear of the forklift. It is a heavy cast iron mass. On electric forklifts, sometimes the batteries are part of the counterweight.
The purpose of the counterweight on a forklift is to balance the load being lifted.