Read this article for better understanding.
http://www.4guysfromrolla.com/articles/051910-1.aspx
Geocoding is the process of finding associated geographic coordinates (often expressed as latitude and longitude) from other geographic data, such as street addresses, or zip codes (postal codes). With geographic coordinates the features can be mapped and entered into Geographic Information Systems, or the coordinates can be embedded into media such as digital photographs via geotagging.
Reverse geocoding is the opposite: finding an associated textual location such as a street address, from geographic coordinates.
A geocoder is a piece of software or a (web) service that helps in this process.
A simple method of geocoding is address interpolation. This method makes use of data from a street geographic information system where the street network is already mapped within the geographic coordinate space. Each street segment is attributed with address ranges (e.g. house numbers from one segment to the next). Geocoding takes an address, matches it to a street and specific segment (such as a block, in towns that use the "block" convention). Geocoding then interpolates the position of the address, within the range along the segment
Type
http://maps.google.com/maps/api/geocode/xml?address=1600+Pennsylvania+Ave,+Washington+D.C.&sensor=false
in the address bar and you would get the xml response
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