Geocoding is the process of transforming a physical address description to a coordinate. Every of your input such as postal address, city or postal code is transformed into a latitude and a longitude representing the location on the earth's surface.
Based on your input type there are different level of accuracies. Country, city or regions are represented as a geographical center of that area. Postal addresses are often represented as the coordinate of the point of the entry.
All country, city or regions data is geocoded with the geonames.org database.
Postal codes are geocoded with the geonames.org database.
Iata codes and airports are geocoded with the openflights.org database.
What3Words addresses are geocoded with the what3words API.