RAC = Reservation Against Cancellation.
You are guaranteed boarding — RAC passengers are allowed on the train. However, you share a Side-Lower berth with another RAC passenger (so each gets a sitting space, not a full sleeping berth).
When another passenger's confirmed ticket is cancelled, RAC tickets get upgraded to CNF in order — usually before chart preparation, sometimes even after the train starts.
RAC examples:
RAC 12— You are 12th in the RAC queueRAC 1— Strong chance of being upgraded to CNF
Always carry valid ID. RAC is honoured by TTE on board.