By default, the erase key is defined as "Control-H". Holding down the Control key while pressing the letter H will move the cursor backwards one character and destroy the letter it has moved over.
If you prefer to make the Backspace key work in this way, you will want to add the following line to the end of your ".cshrc" file:
You will find ".cshrc" in your home directory.
You may also issue this command to make the change happen immediately, otherwise the next time you log back in, the change will take effect.
References:
/usr/local/skel/std.cshrc