Optical activity:
A compound is said to be optically active if it can rotate the plane of plane-polarized light. Haloalkanes with a chiral carbon show optical activity.
Chirality:
A carbon atom bonded to four different groups is called a chiral carbon (asymmetric carbon). Such molecules exist in two non-superimposable mirror image forms (enantiomers).
Retention:
If during a reaction the spatial arrangement around the chiral carbon remains unchanged, the configuration is retained — this is called retention of configuration.
Inversion:
In $S_N2$ mechanism, the nucleophile attacks from the backside, opposite to the leaving group. This flips the configuration at the chiral carbon, called Walden inversion.
Racemisation:
In $S_N1$ mechanism, the planar carbocation formed can be attacked by the nucleophile from either side with equal probability. This gives a mixture of enantiomers (50:50), which is optically inactive due to mutual cancellation. This process is called racemisation.