Alexa Traffic Rank is a rough measure of a website's popularity, compared with all of the other sites on the internet, taking into account both the number of visitors and the number of pages viewed on each visit.
According to the official Alexa website’s Our Data page, the rank is calculated using a ‘combination’ of the estimated average daily unique visitors to the site and the estimated number of pageviews on the site over the past 3 months – with the site with the highest combination of unique visitors and pageviews being ranked as #1. The data is collected from a subset of internet users using one of 25,000 browser extensions for either Google Chrome, Firefox, and/or Internet Explorer. An algorithm then ‘corrects’ for various potential biases and attempts to compensate for visitors who might not be in Alexa’s measurement panel (a factor it historically hasn’t always tried to accommodate for) and normalizes the data based on the geographical location of visitors.