EGR stands for Exhaust Gas Recirculation, Nitrogen oxide (NOX) emissions can be reduced by cooling some of the exhaust gas, which is then redirected back into the charge air. This results in the reduction of the combustion temperature and less nitrogen oxide is produced.
The fuel air mixture can also spontaneously combust. Allowing a small amount of exhaust gas back into the intake reduces combustion chamber temperature. Regulating the flow of exhaust gas is the job of the EGR system.
The total volume of air and exhaustgasses in the intake manifold is larger then it would be without the activated EGR valve. This also increases the pressure in the intake manifold. When the engine tries to suck the combined gases into the cylinders.
The total volume of gas entering the engine contains relatively little oxygen due to the addition of the exhaust gasses. The ECU (Electronic Control Unit) needs to adjust the amount of fuel it adds to the actual amount of oxygen in the gas mixture. Because the total amount of fuel is low compared to the total gas volume, the heat during combustion is lower. These lower temperatures will make the combustion process slower. The ECU needs to compensate the ignition timing.
Another effect of the lower combustion temperature is the lower amount of nitrous oxides (NOx) that are formed during combustion, which is good for the quality of the exhaust gases.