How is data interpreted inside a computer?

Answer 1

At the very lowest level, everything in a computer is represented as a series of binary numbers - 1's and 0's - because this is the easiest system for storing information either electronically (with current being turned off or on) or physically (with magnetic or optical media). Beyond that, however, it gets a lot more complicated:

When you save a file to your hard drive, it's first encoded in a file format. This may be a simple text file, where every character inside is simply represented as a binary number representing that particular character. In other applications, this may be far more complex - such as saving a compressed image or a technical design. Applications themselves are exactly the same - the program is saved as a set of instructions, encoded in binary, for the processor to understand.

This file is then tagged with information (again in binary) to represent it's name, the encoding used, how long the file is, and many other attributes. This is stored on the hard drive (or an external device), somewhere on the disk - the computer's operating system then stores an entry in a "File Allocation Table" to remind it where to look in future to find the file.

This is an extremely simplified version of what goes on - but generally these are the basic principles for what happens when data is saved or used within a computer.