Upon activation, the enemy will receive half the damage he/she inflicted onto his/her opponent.
In the Super Smash Bros. games, Counter is also the name of the "Down + Special" move of Marth, Roy, and Ike.
In Path of Radiance and Radiant Dawn, Counter activates based off of your skill stat. However, in Awakening, it will always activate as long as the unit isn't killed by an attack and the attacker is adjacent to the unit being attacked. In Lunatic+ mode, this skill is devastating for most players, as units will "suicide" into your ranks and will kill your units when they counterattack. This problem continues until after you finish Chapter 4, when you can train your magic users to kill Counter-using enemies from a distance.