1. Changing the storage or transmission scheme for information so that less space (fewer bits) are required to represent the same information. Compressing data means that less space is required for storage and less time for the transmission of the same amount of data. Comes in two flavors: lossless compression, where the original information can be reconstructed precisely, and lossy compression, where something close to the original can be reconstructed but some details may differ.
2. Reducing the size of a data set to lower the bandwidth or space required for transmission or storage.