Coordinates are based on a grid where two axes intersect at the origin point:
the x-axis indicates the player's distance east (positive) or west (negative) of the origin point—i.e., the longitude, the y-axis indicates the player's distance south (positive) or north (negative) of the origin point—i.e., the latitude.
They displays on the top of the screen, left of the Compass.
Interpreting Coordinate Numbers
The origin point marks the zero point for the x and y coordinates. Hence, it may be thought of as the 0:0 coordinate:
x-axis = 0
y-axis = 0
As you travel south, the y-axis number increases; travel north and it decreases. Similarly, the x-axis number increases as you travel east and decreases as you travel west.
One coordinate number equals one chunk (15x15 blocks).
Coordinates can be used for such purposes, for example: once players establish bases, they should note their coordinates before going exploring. If they get lost, they can find their way back to their bases by walking to those coordinates. Second, Coordinates are often used to give directions on where to go to find things or places.