From Bushwalk Australia
Used for navigation purposes. A method of specifying a location on a topographic map, usually 1:25,000 scale, by artificially dividing each grid square into tenths.
This enables a location to be expressed as a six digit figure by using a combination of the numbered grid squares along the map edges and the artificial smaller ones. The resulting six digit figure is called a grid reference.
You can physically draw the smaller grid squares on the map, or mentally estimate their position. Drawing them accurately allows more accurate navigation.
Numerical grid references consist of an even number of digits. The first three digits of the grid reference is called the "easting" and the second three digits is called the "northing". Thus in a 6 digit grid reference 123456, the Easting component is 123 and the Northing component is 456. (Wikipedia) These correspond with latitude and longitude references.