Cell Reference is procedure to make addressing any cell to another cell while typing formula in Microsoft Excel. In each cell address there is two values for cell reference: i.e. column address (A,B,C.....) and row address (1,2,3,...). So cell address is normally reference by column and row address together (A2, C5,...). This addressing procedure is known as Cell Reference.

There are main 2 types of Cell References: Absolute and Relative.

Absolute Cell Reference is used to make fix cell address even we drag the formula for more cells. It remains same always. (For Example: \$C\$2.)  It never changes its exact cell address.
For example:
If Cell C2 has formula as: =\$A\$2+\$B\$2,
then, while dragging that formula, it will not change the formula on next cells as:
C3 = \$A\$2+\$B\$2
C4 = \$A\$2+\$B\$2 and so on.

We can either make fix Row address only or Column address only or both row and column address on Absolute Cell Referencing. To fix only Column address we use \$ sign in front of Column Address only. (For example: \$C2). To fix only Row address we use \$ sign in front of Row Address only. (For example: C\$2). To fix both the Row and Column Address fix, we use \$ sign in both of them. (For example: \$C\$2)

Relative Cell Reference is the default cell referencing in Microsoft Excel. So while we addressing any cell as its cell address (for example: C2) it is relative cell reference (as default). Relative cell reference is that type of cell reference or addressing of cell, which will auto update its address as per what we typed formula to use it.
For example:
If Cell C2 has formula as: =A2+B2,
then, while dragging that formula, it auto updates on next cells as:
C3 = A3+B3
C4 = A4+B4 and so on.

Also, somewhere also we can fine another extra type of Cell Reference: Mixed Cell Reference. Actually Mixed Cell Reference is the mixing both both Absolute and Relative Cell Reference in single cell formula.
For example:
C2= \$A\$2+B2 (mixed cell reference used absolute \$A\$2 and relative B2)
C3=\$A\$2+B3