Pericoronitis is an infection around an unerupted (impacted) tooth. In this case, it is a wisdom tooth behind the last visible tooth in the above image. It is easy to see the inflamed, red, swollen tissue behind the second molar.
Since the gums cannot attach to the enamel of any tooth, there is always a potential space surrounding the unerupted tooth. The space surrounding the impacted tooth is lined with a soft tissue sack called the follicle (see the red arrow in the illustration below). The follicle is made of soft tissue that is generally pink, healthy and would have the same appearance as the gums if it were visible in the mouth. If the enamel on the crowns of both teeth are in contact (see the blue arrow), there is a communication of the normally sterile follicular tissues surrounding the impacted tooth with the oral environment.
Therefore, the germs from the mouth are now free to cause an infection of the follicular tissue. This is what causes pericoronitis.
These infections are generally treated by washing around the impacted tooth with hydrogen peroxide and putting the patient on penicillin for seven to ten days. The infection will go away, but tends to return at intervals until the impacted tooth is finally removed. To learn more about wisdom teeth and how and why teeth are extracted click here.