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Situation Normalization

What does it mean to normalize your data? Here's the Wikipedia definition:

In the design of a relational database management system (RDBMS), the process of organizing data to minimize redundancy is called normalization. The goal of database normalization is to decompose relations with anomalies in order to produce smaller, well-structured relations. Normalization usually involves dividing large tables into smaller (and less redundant) tables and defining relationships between them. The objective is to isolate data so that additions, deletions, and modifications of a field can be made in just one table and then propagated through the rest of the database via the defined relationships.