Data Classification is the process of organizing data into categories based on its sensitivity, importance, or compliance requirements, enabling better management, protection, and usage. By labeling data according to its confidentiality level—such as public, internal, confidential, or restricted—organizations can enforce appropriate security measures tailored to each category. Effective data classification aids in compliance with regulations, optimizes data access controls, and ensures that sensitive information is handled responsibly, minimizing the risk of unauthorized exposure and improving overall data governance.