The process of arranging data into homogenous group or classes according to some common characteristics present in the data is called classification.
For Example: The process of sorting letters in a post office, the letters are classified according to the cities and further arranged according to streets.

Bases of Classification:
There are four important bases of classification:
(1) Qualitative Base   (2) Quantitative Base    (3) Geographical Base (4) Chronological or Temporal Base

(1) Qualitative Base:
          When the data are classified according to some quality or attributes such as sex, religion, literacy, intelligence etc…

(2) Quantitative Base:
          When the data are classified by quantitative characteristics like heights, weights, ages, income etc…

(3) Geographical Base:
          When the data are classified by geographical regions or location, like states, provinces, cities, countries etc…
 
(4) Chronological or Temporal Base:
          When the data are classified or arranged by their time of occurrence, such as years, months, weeks, days etc… For Example: Time series data.

Types of Classification:

(1) One -way Classification:
          If we classify observed data keeping in view single characteristic, this type of classification is known as one-way classification.
For Example: The population of world may be classified by religion as Muslim, Christians etc…

(2) Two -way Classification:
          If we consider two characteristics at a time in order to classify the observed data then we are doing two way classifications.
For Example: The population of world may be classified by Religion and Sex.

(3) Multi -way Classification:
          We may consider more than two characteristics at a time to classify given data or observed data. In this way we deal in multi-way classification.
For Example: The population of world may be classified by Religion, Sex and Literacy.