Georeferencing is the process of assigning x, y coordinates to a raster file, such as an aerial photograph, scanned historical map, etc. so GIS software can place the resulting georeferenced file in its specified location on a map. The georeferencing process involves assigning control points to the raster image and matching them to control points on an existing georeferenced data set.
Georeferenced fire insurance map of Harvard Square (1885). Map from Insurance Maps of Boston, Vol. 4.