A typical wiki installation will allow any anonymous internet user to pop by and make an edit without logging in. Wiki “soft security” is what makes this possible. This is unique to wiki software, and one of the things which make wikis great.
Some people, however, believe that a wiki should support some kind of authentication. They think that a wiki should allow regular contributors to register and login (authentication). Here's why they think this is important: It means communities can build up and individuals can build trust between each other, while edits from casual visitors are viewed with more suspicion (subject to more rigorous peer review). Full authentication using passwords is generally regarded as necessary, with any community web application, in order to prevent one person (such as a malicious vandal) impersonating another, making edits as their username. Be aware that there are a number of wiki implementations which do make proper use of passwords to prevent impersonations.
Other people believe that impersonations are easily detected and should be handled like any other vandalism by anonymous internet users. Therefore they don't believe that authentication is necessary.
The mechanism behind authentication is usually built-in to the wiki software, e.g. the scripts check against a database of usernames and passwords. The login processes normally follow the typical website approach, with a login form, storing cookies, and allowing passwords to be emailed when forgotten.
However some wiki software provides integration with other external systems. This can be very useful in corporate intranet environments, allowing you to set up quicker easier authentication, hidden from the user. A wiki might allow logins to verified against systems such as active directory, PAM, or LDAP.