Defining the projection for a dataset is a very important part of working in ArcGIS. Although it is possible to work with data that have an undefined projection, it is not possible to properly overlay data from different projections without first defining a projection. Additionally, certain analysis tools can be inaccurate with data that does not have a projection defined.
Defining a projection is different from projecting data. Defining a projection simply attaches the information ArcGIS requires to properly display and process the data. Defining a projection for a dataset does not modify the coordinates of the data.
The method for defining the projection for ArcGIS data varies by data type, for example: Geodatabase, coverage, and shapefile.
Note: When referring to ArcGIS, the terms coordinate system and projection are often used interchangeably. In actuality, it is important to define a coordinate system for your data. A coordinate system can, but does not always, include projection information.
To define coordinate systems/a projection for your data, read the topics specific to the data type in the Related Information section.