In most cases, cracked skin on the heel is related to dry skin. Strong shocks can also increase pressure in the heel area. Diabetic nerve damage can make the feet more drier.
Dry and inflexible skin can crack all the way to the dermis. Broken skin exposes you to infections.
If you have cracks in your heels, the primary treatment is careful and regular moisturizing with a sufficiently rich base cream. Soft, shock-absorbing insoles can prevent the skin from cracking.