Classification means sorting out things into groups on the basis of similarities and differences among them.
Data classification is the process of sorting and categorizing data into various types, forms or any other distinct class. Data classification enables the separation and classification of data according to data set requirements for various business or personal objectives. It is mainly a data management process.
Techopedia explains Data Classification
Data classification is a diverse process that involves various methods and criteria for sorting data within a database or repository. This is generally done through a database or business intelligence software that provides the ability to scan, identify and separate data. Some examples and applications of data classification include:
Separating customer data based on gender
Identifying and keeping frequently used data in disk/memory cache
Data sorting based on content/file type, size and time of data
Sorting for security reasons by classifying data into restricted, public or private data types