You set the pitch first (checked with a gauge when the blades are at rest). That gets the blades mechanically close in the same range together. It doesn't take into consideration the play in the entire head which might make one blade or the other "off" as it rotates.

The tracking is fine tuning .. just another small pitch adjustment that you make when the blades are at rest, then observing the blades as they are spinning at different rpm's - with continued adjustments to one blade or the other until the blades appear to look as one when looked at horizontally.

Both are pitch adjustments, but tracking is tuning the blades a little bit (usally less than one full turn of a ball link end) so they track well together (by using the same adjustments that you use when setting the initial blade pitch). Tracking tape can then be used as a visual marker to fine tune them perfectly. (Thanks Cactus Hopper)