^C is another way of expressing the command Ctrl+C.
On *nix based systems, ^C is used to interrupt the flow of a running program or script, causing it to end its execution. This can be useful for programs that aren't responding or to interrupt the flow of an 'rm -rf /' before it does too many naughty things.
It can also be a shortcut to the Copy command. Ctrl+X is a shortcut to the Cut command.