In computer science, a preprocessor is a program that processes its input data to produce output that is used as input to another program. The output is said to be a preprocessed form of the input data, which is often used by some subsequent programs like compilers. The amount and kind of processing done depends on the nature of the preprocessor; some preprocessors are only capable of performing relatively simple textual substitutions and macro expansions, while others have the power of fully-fledged programming languages.
A common example from computer programming is the processing performed on source code before the next step of compilation. In some computer languages (eg, C) there is a phase of translation known as preprocessing.
Lexical pre-processors
Lexical preprocessors are the lowest-level of preprocessors, insofar as they only require lexical analysis, that is, they operate on the source text, prior to any parsing, by performing simple substitution of tokenized character sequences for other tokenized character sequences, according to user-defined rules. They typically perform macro substitution, textual inclusion of other files, and conditional compilation or inclusion

Extending a language

The best examples of language extension through macros are found in the Lisp family of languages. While the languages, by themselves, are simple dynamically-typed functional cores, the standard distributions of Scheme or Common Lisp permit imperative or object-oriented programming, as well as static typing. Almost all of these features are implemented by syntactic preprocessing, although it bears noting that the "macro expansion" phase of compilation is handled by the compiler in Lisp. This can still be considered a form of preprocessing, since it takes place before other phases of compilation.
Similarly, statically-checked, type-safe regular expressions or code generation may be added to the syntax and semantics of OCaml through macros, as well as micro-threads (also known as coroutines or fibers), monads or transparent XML manipulation.

Specializing a language

One of the unusual features of the Lisp family of languages is the possibility of using macros to create an internal Domain-Specific Programming Language. Typically, in a large Lisp-based project, a module may be written in a variety of such minilanguages, one perhaps using a SQL-based dialect of Lisp, another written in a dialect specialized for GUIs or pretty-printing, etc. Common Lisp's standard library contains an example of this level of syntactic abstraction in the form of the LOOP macro, which implements an Algol-like minilanguage to describe complex iteration, while still enabling the use of standard Lisp operators.

The MetaOCaml preprocessor/language provides similar features for external Domain-Specific Programming Languages. This preprocessor takes the description of the semantics of a language (i.e. an interpreter) and, by combining compile-time interpretation and code generation, turns that definition into a compiler to the OCaml programming language -- and from that language, either to bytecode or to native code.

from : en.wikipedia.org