A geocaching location is revealed mainly by its coordinates, specifically, latitude and longitude.
Latitude: The horizontal lines that go around the Earth from east to west.
Longitude: The vertical lines that cover the Earth from north to south.
When a latitude coordinate crosses over a longitude coordinate, then X marks the spot!
Like a circular clock, which is divided into hours, minutes, and seconds, the measurement around the spherical earth is also divided into degrees, minutes, and seconds. Each line that you see representing latitude or longitude is 10 degrees and is then broken into smaller segments, minutes and seconds, for more accurate measurements.
One degree of latitude equals approximately 364,000 feet (69 miles or 111 km), one minute equals 6,068 feet (1.15 miles or 1.9 km), and one-second equals 101 feet (30.8 meters).
Measuring starts from two places. The measurement of latitude starts at the equator. Heading north from the equator, each line is increasingly ten degrees farther north, and heading south, each line is increasingly ten degrees farther south.
Take this example:
N 47° 38.938′ W 122° 20.887′
Because the coordinates start with N, we know that this location is north of the equator. Because the first number—which indicates the degrees—is 47, we know that it is 47 degrees, so four and 7/10ths lines of latitude above the equator. The next numbers are 38.938. This is a further precision of the measurement into minutes and seconds, meaning this location is 38 minutes and .938 x 60 seconds (almost 1 minute) farther north. (source)