AAA refers to Authentication# (who are you), Authorisation# (what can you do) and Accounting# (what did you do).
An AAA server should be attached to a network access point (whether it is a network access server, Router, or terminal server). The user will request access to the network, which the AAA server compares the user-supplied authentication data, forwarded by the network access point, with its database stored user-associated data to see if the information match. If it matched, Authroisation will take place to see what services do this user have access to, and later records their activities within the network.
There are several implementations of AAA: