Preceding means 'the one just before'. It points backwards from some moment or place you have already named. 'The preceding year' is the year before the one being talked about; 'the preceding paragraph' is the paragraph just above. Two things make it different from 'previous', which is its close neighbour. First, preceding is more formal and more written — you meet it in reports, textbooks, contracts and academic writing, almost never in speech. Second, and this is the useful part, preceding is measured against a point in the story, not against now. 'Last year' means the year before today. 'The preceding year' means the year before whatever year we were just discussing, which might be 1890. So it is the word writers reach for when they are moving through a sequence. It sits in front of a noun ('the preceding chapter'), and unlike 'previous' it is not really used after the verb — you do not say 'the chapter was preceding'. The same form is also the -ing form of the verb precede, as in 'the storm preceding the flood', meaning the storm that came before it.