Understanding is the ability to understand something; comprehension; the power of abstract thought; an individual's perception or judgement of a situation; sympathetic awareness or tolerance; an informal or unspoken agreement or arrangement.

One gains knowledge through context (experiences) and understanding. When one has context, one can weave the various relationships of the experiences. The greater the context, the greater the variety of experiences that one is able to pull from.

The greater one understands the subject matter, the more one is able to weave past experiences (context) into new knowledge by absorbing, doing, interacting, and reflecting.

Understanding is a continuum:

- Data comes about through research, creation, gathering, and discovery.
- Information has context. Data is turned into information by organizing it so that we can easily draw conclusions. Data is also turned into information by "presenting" it, such as making it visual or auditory.
- Knowledge has the complexity of experience, which come about by seeing it from different perspectives. This is why training and education is difficult - one cannot count on one person's knowledge transferring to another. Knowledge is built from scratch by the learner through experience. Information is static, but knowledge is dynamic as it lives within us.
- Wisdom is the ultimate level of understanding. As with knowledge, wisdom operates within us. We can share our experiences that create the building blocks for wisdom, however, it need to be communicated with even more understanding of the personal contexts of our audience than with knowledge sharing.

Often, the distinctions between data, information, knowledge, and wisdom continuum are not very discrete, thus the distinctions between each term often seem more like shades of gray, rather than sharp black and white.

Data and information deal with the past. They are based on the gathering of facts and adding context. Knowledge deals with the present. It becomes a part of us and enables to perform. However, when we gain wisdom, we start dealing with the future as we are now able to vision and design for what will be, rather than for what is or was.