Data is raw facts or observations that can be processed to produce meaningful information. Data takes various forms like numbers, text, images, etc. and is stored and represented digitally using bits and bytes. Data is organized in a hierarchy from bits to bytes to fields to records to files and ultimately databases. There are two main types of data processing - batch processing where data is processed periodically in batches, and online/immediate processing where transactions are processed immediately to update files in real-time.