To enable tracking in an entity you have to configure the update methods of the entity to log the changes.

This is done by adding this.SaveChangeLog(MyItemID); to the update methods. MyItemID is the unique key of the entity.
Only updated items are tracked. The creation and last update information is saved in each entity database row.
 
After enabeling tracking for the entity you have to configure which fields you want to track.

The configuration is saved in the XConfigLogFields table, where the fields to be tracked are entered.
The history is then stored in XLogUserProcessLogging.