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Ordnance Survey – Great Britain's national mapping agency

Is your data georeferenced?
It is important to understand this concept because when you use a GIS, you are often combining different layers of spatial data. An over riding coordinate system is needed so that spatial data layers can be referenced to the earth's surface in the same way. Otherwise, if you use different coordinate systems, there will be no way to analyse the relationship between the data. In this image, two layers of data have both been georeferenced to the same coordinate system and hence match together.
What is georeferenced data?
Georeferenced data is spatial data that is referenced to a location on the earth's surface. To do this, common frames of reference and coordinate systems have been set up. This is a tricky business and this section will explain why.
It is clear that points and features on, above and below the earth's surface have position. To express that position, you need to choose an appropriate coordinate system so that positions can be defined within it. Such a system must obviously give each point a different coordinate.
There are thousands of coordinate systems in use throughout the world. It is possible for a user to invent their own and, indeed, this is often done for large engineering works. The disadvantage is that points outside the area of the bespoke system cannot be coordinated within it and the relationship between the bespoke and other systems is hard to define.
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