1 How do PTC sites work? 
PTC
sites is a way to communicate between advertisers and publishers (in
this case the clickers or also called affiliators). Advertisers want to
show their sites to people and they pay for it. Users at the ptc sites
want to earn money and they do it by clicking the ads from advertisors.
 

2 What is a referral? 
There is an "upline" and a "downline".
The downline is the so called "referral", a person who joined with a
special link from already existing user. The upline is the person who
is already registred at a site and is helping other people to register
at the sites with the special link from the upline.  

3 Why do we need referrals? 
The
PTC and many GPT (Get Paid To) owners invest a lot of money in their
sites. They also have to invest in selfsponsored ads when they start
because there are no advertisers willing to advertise at a site with
only 10 members. That's why they offer referral earnings to the people
who help other people to register witht heir special link called
"referral link or ref link". Referral earnings can be everything from
5-100% of what the downline (referrals) earn to 1-10 cent for each new
referral that join your downline.  

Referral
earnings help the ptc owners to use less money on advertising (or no at
all) in the long run. The higher referral earnings are the more people
are willing to invest their own money in advertising the site to get
these referral earnings that can be really huge if you got a very big
downline (many referrals).