Geohash is a latitude/longitude encoding system using Base-32 characters.
Geohash is a latitude/longitude geocode system invented by Gustavo Niemeyer when writing the web service at geohash.org, and put into the public domain. It is a hierarchical spatial data structure which subdivides space, then interleaves the latitude and longitude information in a bitwise fashion.
Geohashes offer properties like arbitrary precision and the possibility of gradually removing characters from the end of the code to reduce its size (and gradually lose precision).
Nearby places will often (but not always) present similar prefixes. The longer a shared prefix is, the closer the two places are.