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Preamp refers to any stage in the audio path in which the signal is processed before being amplified. The preamp inside a head unit takes the raw signals from the various sources in the head unit, such as the CD player or radio tuner, and sends the low-level output (also called line-level output) to the amplifier.
Subsequently, one may also ask, what is the purpose of a preamp?
The purpose of a preamp is to amplify low level signals to line level, i.e. the “standard” operating level of your recording gear. So you need a preamp for just about any sound source. But this doesn't have to be an external device. Most audio interfaces already come with built-in preamps.
Then, what is the difference between an amplifier and a preamplifier?
The basic difference between a preamp and amp is: Preamp is used for boost the input signal to match the line level signal and an Amp or amplifier is used to amplify the line level signal to get sound on speakers.
A preamp is a “pre amplifier” and, as the name suggests, it prepares the signal coming from a pickup or microphones for further amplification. There are a number of reasons to get a preamp: It can boost a low signal. It can clean up a signal so that it sounds better coming through the amp.