Each weapon has certain advantages. Most sword type weapons get +1 counterattack. Heroes can also choose to get bonus counterattacks from leveling. Spears make a unit immune to counterattacks.

Let's say you have a champion whose weapon allows for one counterattack.  The enemy's turn comes up, and the first one approaches your champion, and swings at her.  She has one counterattack, and swings back.  If a second enemy unit swings at her in this same turn, she won't be able to respond, because she only has one counterattack.

Hope that helps.

Ah thanks everyone, makes perfect sense now.

I was getting countered and couldn't figure why. I saw '+1 counter attack' and was looking around for some counter attack stat that figured into it..