FORWARD is used for packets that must pass through the box to get to their destination.
For local packets, the destination ip address is somewhere in the Internet, so the routing table decides they have to go thru' FORWARD. This is called using the box as a Gateway.
For incoming packets, the nat
PREROUTING table needs to give the packets an address that is in the local network before they go thru' the FORWARD chain. This is called DNAT, 'destination network address translation'.
Have a read of his tutorial
for extra indepth info.