Coin grading is the process of attempting to determine a coins value. It provides a basis for both buyers and sellers when deciding on the quality of a coin and it's market value.
When people first started collecting and grading coins, they were divided into two groups or grades. Coins were either new or used. But after awhile those grades were much too broad. Something a little more defining had to be used.
Even though the grading system today is much more sophisticated, it's still based on human interpretation.
If you submit the same coin to 2 different grading services, you may get 2 different grades. Sometimes even the same service will give a coin a different grade if it's submitted more than once.
This has been taken advantage of by coin sellers trying to get a higher grade for a coin so they can put a higher price tag on it.
One company had the idea to use computers to grade coins. But the computers showed less consistency than human graders did.
Coin grading is a continually evolving process. As more and more people start collecting and more coins are passed around, the grading system grows. More distinctions are made and more categories are created.
So even though the grading system is a good basis for determining the value of collectable coins, it's not something to be believed and followed blindly.
The best thing for any new collector is to learn some basic coin grading on their own.