There are a number of good ways of looking at this. The easiest thing for me is to think about the relation between "Inductive" and "Coinductive definitions"
An inductive definition of a set goes like this.
The set "Nat" is defined as the smallest set such that "Zero" is in Nat, and if n is in Nat "Succ n" is in Nat.
Which corresponds to the following Ocaml
type nat = Zero | Succ of nat
One thing to not about this definition is that the number
omega = Succ(omega)
is NOT a member of this set. Why? Assume that it was, now consider the set N that has all the same elements as Nat except it does not have omega. Clearly Zero is in N, and if y is in N, Succ(y) is in N, but N is smaller than Nat which is a contradiction. So, omega is not in Nat.
Or, perhaps more usefully for a computer scientist:
Given some set "a", the set "List of a" is defined as the smallest set such that "Nil" is in List of a, and that if xs is in List of a and x is in a "Cons x xs" is in List of a.
Which corresponds to something like
type 'a list = Nil | Cons of 'a * 'a list
The operative word here is "smallest". If we didn't say "smallest" we would not have any way of telling if the set Nat contained a banana!
zeros = Cons(Zero,zeros)
is not a valid definition for a list of nats, just like omega was not a valid Nat.
Defining data inductively like this allows us to define functions that work on it using recursion
let rec plus a b = match a with
| Zero -> b
| Succ(c) -> let r = plus c b in Succ(r)
we can then prove facts about this, like "plus a Zero = a" using induction (specifically, structural induction)
Our proof proceeds by structural induction on a.
For the base case let a be Zero.
plus Zero Zero = match Zero with |Zero -> Zero | Succ(c) -> let r = plus c b in Succ(r) so we know
plus Zero Zero = Zero.
a be a nat. Assume the inductive hypothesis that
plus a Zero = a. We now show that
plus (Succ(a)) Zero = Succ(a) this is obvious since
plus (Succ(a)) Zero = match a with |Zero -> Zero | Succ(a) -> let r = plus a Zero in Succ(r) = let r = a in Succ(r) = Succ(a)
Thus, by induction
plus a Zero = a for all
a in nat
We can of-course prove more interesting things, but this is the general idea.
So far we have dealt with inductively defined data which we got by letting it be the "smallest" set. So now we want to work with coinductivly defined codata which we get by letting it be the biggest set.
Let a be a set. The set "Stream of a" is defined as the largest set such that given x such that x is in stream of a, x consists of the ordered pair (head,tail) such that head is in a, and tail is in Stream of a
In Haskell we would express this as
data Stream a = Stream a (Stream a) --"data" not "newtype"
Actually, in Haskell we use the built in lists normally, which can be an ordered pair or an empty list.
data [a] =  | a:[a]
Banana is not a member of this type either, since it is not an ordered pair or the empty list. But, now we can say
ones = 1:ones
and this is a perfectly valid definition. Whats more, we can perform co-recursion on this co-data. Actually, it is possible for a function to be both co-recursive and recursive. While recursion was defined by the function having a domain consisting of data, co-recursion just means it has a co-domain (also called the range) that is co-data. Primitive recursion meant always "calling oneself" on smaller data until reaching some smallest data. Primitive co-recursion always "calls itself" on data greater than or equal to what you had before.
ones = 1:ones
is primitively co-recursive. While the function
map (kind of like "foreach" in imperative languages) is both primitively recursive (sort of) and primitively co-recursive.
map :: (a -> b) -> [a] -> [b]
map f  = 
map f (x:xs) = (f x):map f xs
same goes for the function
zipWith which takes a function and a pair of lists and combines them together using that function.
zipWith :: (a -> b -> c) -> [a] -> [b] -> [c]
zipWith f (a:as) (b:bs) = (f a b):zipWith f as bs
zipWith _ _ _ =  --base case
the classic example of functional languages is the Fibonacci sequence
fib 0 = 0
fib 1 = 1
fib n = (fib (n-1)) + (fib (n-2))
which is primitively recursive, but can be expressed more elegantly as an infinite list
fibs = 0:1:zipWith (+) fibs (tail fibs)
fib' n = fibs !! n --the !! is haskell syntax for index at
an interesting example of induction/coinduction is proving that these two definitions compute the same thing. This is left as an exercise for the reader.