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Compaction is a step in which you compact your subgrade, meaning you tamper it down as tight as possible. After your native soil, you wanna add some base rock, maybe three-quarter crushed rock or some virgin base rock, and get it real tight. This assures you that your slab won't settle, crack, or deteriorate over time.
Compaction and rebar will keep your slab in good shape for a long time. Without compaction, your slab will quickly deteriorate over time. You'll start to notice hairline cracks or even bigger cracks that later will cost you money to get it repaired. Depending on the size of your project, could use multiple equipment to get it done right.
For something small, probably under 800 square feet, you could use a vibrating plate, maybe a jumping jack. For anything bigger, you use a bigger compactor, which we call a turtle. Big, heavy machine to get it done right, usually for really large areas. And when you're doing things like roads or whatnot, you use a big roller, ride-on rollers, so you could make sure that everything's nice and tight.