Spreadsheets allow us to point to other cells when entering formulas. This is called a reference. A reference can point to a single cell (C1) or to a range of cells (C1:C10). References can use relative location (one cell down and two to the right) or absolute (C1). This post provides an overview and examples of these two methods for specifying cell location.
Cell references are relative references by default. That is, they identify other cells based on distance in both horizontal and vertical directions. This boils down to something like two cells to the right and one cell down from my current location.