In situations where data has been collected and assigned to postal or area codes, it is usually necessary to convert these to geographic coordinates by use of a definitive directory or gazetteer file. They provide a method of determining the level of accuracy of the georeferencing process. Residuals are the difference between the actual coordinates of the control points and the coordinates predicted by the geographic model created using the control points. To georeference an image, one first needs to establish control points, input the known geographic coordinates of these control points, choose the coordinate system and other projection parameters and then minimize residuals. Images may be encoded using special GIS file formats or be accompanied by a world file. In other words, there must be only one location for which a georeference acts as the reference. A georeference must be a unique identifier. For instance, a GPS device will record latitude and longitude coordinates for a given point of interest, effectively georeferencing this point.
One can georeference a set of points, lines, polygons, images, or 3D structures. There are various GIS tools available that can transform image data to some geographic control framework.
The most visible effect of georeferencing is that display software can show ground coordinates (such as latitude/ longitude or UTM coordinates) and also measure ground distances and areas. The relevant coordinate transforms are typically stored within the image file ( GeoPDF and GeoTIFF are examples), though there are many possible mechanisms for implementing georeferencing. Georeferencing means that the internal coordinate system of a map or aerial photo image can be related to a geographic coordinate system.