Geofencing is a relatively new term used in various location-based scenarios. It refers to the process of defining a fence around a particular location but using technology, not the normal physical fences.
An example is you have 5 company locations, and you want to track attendance for your staff at these locations, but you want to ensure that the staff assigned to location A can only log in and log out from location A and not any other location. This is where geofencing comes in.
You will define location A, with the help of GPS or the location feature of the device in the system, then you will allow the user only to log in and log out from that specific location A and not any other location. If the user tries to log in from other locations, it will prompt the user with a message that he is not authorized to do so.
Geofencing has many use cases, it is an extremely powerful and cost-effective solution to ensure compliance with company policies.