A Golden Mushroom is a recovery Item (usually obtained by lower place racers) that was first introduced in the Nintendo 64 game, Mario Kart 64 and has since been in every other Mario Kart game afterwards except Mario Kart: Super Circuit. And very rarely, when the 1st placer is far away, the 2nd placer can use the Golden Mushroom. In Mario Kart: Double Dash!!, it's the Special Item of Toad and Toadette.
In relation to Mario Kart, a Mushroom is an item that gives the kart an instantaneous boost of speed. A particular Mushroom, known as the Golden Mushroom, can be used over and over until time runs out. It is usually received in the lower positions and allows racers to catch up by not only providing them with a huge speed boost but allowing them to traverse extremely long passages of off-road terrain without slowing down, letting them take shortcuts that few other items would allow. Spamming it recklessly on curved sections on track, including pit-laden areas is not advised, because of the high-speed boosts, compound steering, and handling difficulties. It can be stolen by a Boo item during use. In all games except for Mario Kart: Double Dash!!, the Golden Mushroom can be picked up by any player; in the aforementioned game, however, it is the signature item of Toad and Toadette and can be picked up by them or King Boo and Petey Piranha only, the latter two being able to receive any special item. Its appearance is golden and wears a crown similar to Peach's.
If hit by an item or obstacle (excluding Mario Kart DS), you can use it to speed up, also giving you the advantage to speed past other players.