The newest form of headless technology can be found in websites. Traditional websites have their own back-end and front-end (graphical user interface). All the pieces work with the same code base and communicate directly with each other, making the website as a whole. However in a headless installation the front-end is a stand-alone piece of software, which through API communicates with a back-end. Both parts operate separately from each other, and can even be placed on separate servers, creating a minimum version of a multi-server architecture. The bridge between both parts is the API client. The endpoints of the API are connected to each other.
The biggest advantages of this technology can be found in performance optimisation and flexibility of the software stack.
Source: Wiki