link wheel and link circle is one of the most powerful and most advanced methods for achieving a higher ranking. It is process in which you build a dozen or so new blogs/web pages using web 2.0 properties such as squidoo, blogger, hubpages and etc, all on the same topic as your main blog or website.
A link circle (or link wheel) is where site A links to site B and site B links to site C and site C links to site D and site D links back to site A. There can be an infinite number of links in the wheel. The idea is to have enough sites in the wheel as to trick Google into never figuring out that it is just a big link swap, since Google devalues links that are part of link exchanges or link swaps.
I think Link wheel and link circle both are similar terms but yet there is minor different. As in link circle we link to only some definite site and this linking process is going on to each other site circularly.
Yes link circle means that the back links which are made in cirlce.. Like on website is linking to next one and next one is linking to next one... and then last back link will link to first one.. This is what make the circle.. and this method is called circle back links.