A callback URL "calls back" a web address rather than a bit of code and it can be invoked by an API method. That URL can be anything. It doesn't have to be a static URL. Often it is a script to perform certain functions.
For eg. if you call,
Then, when /foo is finished, it sends a request to "http://my.server.com/bar". The contents and method of that request will vary as per Callback parameters specified in API documentations.