Fragmentation occurs when you save a file containing more data than can fit into one contiguous (connected) space on the disk. When this happens, the drive splits the data into many pieces small enough to fit wherever it can find the next empty space. If that first space isn't large enough, it puts down the next piece at the next empty space, and so on and so on. This is actually quite an efficient method of making use of the entire disk, as you can imagine how quickly a disk would fill if the computer needed a contiguous space for each file.
What causes fragmentation? Change. An example: In the very beginning, when you first saved or copied data to a newly formatted disk (an "empty" disk, for simplicity's sake) all the data you saved was laid down in a contiguous fashion-one file abutting the next file, that file abutting the next file, and so on. Let's say several days later you decided to add a few more chapters to that novel you've been working on. When you save these new pages, they simply are not going to fit in the same space that the novel file previously occupied. Therefore, the disk is going to have to fragment the newly expanded file by putting these new pages somewhere else on the disk. Fortunately, the computer keeps a record of just where everything resides on the disk, so there's no extra, inherent danger in losing your data due to fragmentation.
What does occur, though, is now the disk heads (the physical part of the drive that reads and writes the data-picture the arm on a record player) have to travel a greater distance to retrieve that data next time you need it. This extra travel causes two things to happen. First, it's going to take more time to access that information. Not a lot of time, mind you, but if your disk is severely fragmented, you may notice large files taking longer to open and/or save. The other thing that's going to happen is this extra movement is going to put extra wear and tear on the drive heads themselves. As with any mechanical device, the less unnecessary use the better.
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