The potentiometer is a three point resistor that can also act as variable resistor if only two terminals are used, i.e. One side and the wiper. It is an adjustable voltage divider and is also known as pot. This device is used to measure and control the electric potential (voltage) of electrical devices. It is commonly used in justice, audio power amplifiers and displacement transducers.
To know more about potentiometer, follow this link: http://en.wikipedia.org/wiki/Potentiometer#Audio_control