Right now the best sources I can find are:
@MarkAdler's comment below this answer to the question How does Curiosity know how to point and move it's high gain antenna in real time? says
Bottom line: accelerometers give down, Sun gives azimuth. On-board ephemerides of Earth, Mars, and the location of the rover on Mars, all of which are kept up-to-date by the operations team, allow the HGA to be slewed to track Earth in the sky. There is one more critical instrument and calibration required: the current time.
and the collective discussions in various answers and extensive commenting below the question How do launches avoid leap seconds? Why?
Spacecraft have clocks for many reasons. For deep space missions they are important to add time stamps to recorded data and images, and to execute instructions that have previously been sent from the ground.
For say a correction burn or a schedule of images, these instructions are sent ahead of time, and refer to moments in time as defined by the spacecraft's local clock. The ground also carefully monitors errors or drifts in that clock and either makes corrections in the instruction times, or send a delta correction. For different missions and orbits one might be considered better than the other.
For deep space spacecraft, the distances can be measured very accurately using transponders; you send a signal with a long, complex encoded series of pulses, the satellite receives it and rebroadcasts it directly on a different frequency. By measuring the total time delay between the sent and received pulse pattern, you get the round-trip light time. If the returned signal also has encoded on it the spacecraft's clock time, you know how to synchronize it with clocks on the ground, or correct for the difference.