The horizontal datum is the model used to measure positions on the earth. A specific point on the earth can have substantially different coordinates, depending on the datum used to make the measurement. There are hundreds of locally-developed horizontal datums around the world, usually referenced to some convenient local reference point. Contemporary datums, based on increasingly accurate measurements of the shape of the earth, are intended to cover larger areas.
The WGS84 datum, which is almost identical to the NAD83 datum used in North America, is a common standard datum and the default for coordinates displayed in most commercial GPS units. The NAD27 datum is commonly used on older USGS topographic maps. The user of a GPS unit should normally change the datum it uses to display coordinates to match the datum of the map on which the coordinates are being plotted.
--Source Datum Wikipedia
See also reference ellipsoid.