Tor was originally designed, implemented, and deployed as a third-generation onion routing project of the U.S. Naval Research Laboratory. Tor is a free software implementation of second-generation onion routing, a system enabling its users to communicate anonymously on the Internet.
Tor will protect a Users privacy from unscrupulous marketers and identity thieves. Internet Service Providers (ISPs) sell your Internet browsing records to marketers or anyone else willing to pay for it. ISPs typically say that they anonymize the data by not providing personally identifiable information, but this has proven incorrect. A full record of every site you visit, the text of every search you perform, and potentially userid and even password information can still be part of this data. In addition to your ISP, the websites (and search engines) you visit have their own logs, containing the same or more information.
They protect their communications from irresponsible corporations. All over the Internet, Tor is being recommended to people newly concerned about their privacy in the face of increasing breaches and betrayals of private data. From lost backup tapes, to giving away the data to researchers, your data is often not well protected by those you are supposed to trust to keep it safe.
They protect their children online. You've told your kids they shouldn't share personally identifying information online, but they may be sharing their location simply by not concealing their IP address. Increasingly, IP addresses can be literally mapped to a city or even street location, and can reveal other information about how you are connecting to the Internet. In the United States, the government is pushing to make this mapping increasingly precise.
They research sensitive topics. There's a wealth of information available online. But perhaps in your country, access to information on AIDS, birth control, Revolution, Torrenting,Tibetan culture, or world religions is behind a national firewall.