A counter irritant is an agent that counters a deep pain by causing a superficial distraction. For example, menthol creates a burning sensation sensation in the skin, which can distract from "deeper" muscle, joint or bone pain. Although the burning sensation is more "loud" then the deeper pain, it is (hopefully) less psychologically harmful then the chronic back pain.
The downside to this kind of relief is that it is, of course, only a temporary distraction from the "deep seated" pain. Even the best topical creams (such as Tiger Balm only work for an hour or so, after which the nerves and\or muscles undeneath are still strained and\or pinched. As with any pain killer, counter irritants deal only with the symptoms, not with the condition.
In addition to chemicals that work as counter irritants, there can also be mechanical counterirritants. For example, people with eczema will often engage in placing an irritated surface inside of near-boiling hot water, or rubbing their skin until their epidermis is rubbed off, in an attempt to produce sensations which overwhelm the rather odd feeling of irritation that eczema sufferers can experience. This is, of course, not a helpful application of mechanical counterirritation.
Although counterirritation can not provide a cure, it can provide a helpful tool in pain management.