Internal links are links on web pages pointing to other web pages within the same website. These links can take many forms, and are things every website uses naturally to one degree or another. From an SEO perspective though, there are a few important points to keep in mind
Most importantly, this is a way for search engines to naturally “flow” through the site. As such, you need to make sure every page on your site has at least one internal link pointing to it. It doesn’t matter how important a page is; if there’s no other page linking to it, neither users nor search engines will find it.
Minimize the number of links you need to follow to get somewhere as much as possible. Effectively using categories and sub-categories is a common way to do this.
Avoid using “directory” pages with dozens or hundreds of links in a list. While technically fulfilling the above requirements, in most circumstances they will result in a poor user experience, breaking the cardinal rule of SEO stated at the beginning. As a result, search engines will place less value on it. Exceptions to this are sets of pages that naturally lend themselves to directories, such as a staff page or a list of forms.