What is the difference between Referenced Entity and Referencing entity in views
Say you have a content type called course that has a entity reference field that targets a content type called school.

In views you could now add a relationship using "Entity Reference: Referenced Entity" and fetch values from the school that the course belongs to.

You list of courses could now show something like:
Course X - School X

So far so good.

Now let's say you want to list schools and which courses they provide.
Since the entity reference field points from course to school you need to fetch the reference the other way. Now you can instead use "Entity Reference: Referencing entity". This way you could list schools and courses:

School X - Course X.

You will end up with duplicate rows in some cases if several courses points to the same school, but that's another story :)

Hope this made the relationship bit clearer.