Data forms the building blocks of knowledge and understanding. Without data we have no knowledge or any understanding.
Data is a collection of words, numbers, images, sounds or anything which can be recorded. On its own, data is raw as it has no context. Data elements need to be part of some kind of structure to give the data some meaning.
For example, the list of numbers 5, 3, 25, 9 is considered to be data. What do the numbers relate to?
Once data elements have some context, the data elements are considered to be information. They have some meaning because they are considered in context.
The fifth car I saw today had 3 people in it. It was travelling at 25 miles per hour. I think the car was 9 years old. Now we have given the data some context, it is considered to be information.
Knowledge is the ability to understand information and to then form judgements and opinions and make predictions and decisions based on that understanding. In short, data leads to information which leads to knowledge.
In our car example, we may make a judgement on the age of the car. We might decide the owner would consider changing the car within the next few years.
Knowledge leads to understanding and understanding leads to Wisdom.
This is sometimes referred to as the DIKW hierarchy which aims to provide a structural relationship between data, information, knowledge and wisdom.
Data is clearly the lowest form of abstraction from which knowledge and understanding are derived.