Indexing is how Magento transforms data such as products, categories, and so on, to improve the performance of your web store. As data changes, the transformed data must be updated or reindexed.
Magento has a sophisticated architecture that stores lots of merchant data (including catalog data, prices, users, stores, and so on) in many database tables. To optimize web store performance, Magento accumulates data into special tables using indexers. For example, if you change the price of an item from $1.99 to $3.99. Magento must reindex the price change to display it on your web store.
Without indexing, Magento would have to calculate the price of every product on the fly—taking into account shopping cart price rules, bundle pricing, discounts, tier pricing, and so on. Loading the price for a product would take a long time and decrease your website performance.
You can easily rebuild your Magento data indexes via your Magento admin panel>System>Index Management.