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A link wheel involves creating several layers of web properties in-between the site they intend to rank. This usually includes Web 2.0 properties, blogs, misc. web pages, forum profiles and social media sites, etc. These properties are all created and linked to a specific page, which in turn links back to either another page or the site you are trying to rank.
Link wheels are powerful because the search engines know that popular sites (the ones they want to rank) have small communities of websites based around them linking to each other and also linking back to the main site. It follows the Internet’s natural linking pattern and has been proven to be one of the best link building strategies employed by the best SEO companies.