The first thing to know about url encoding, also known as percent-encoding, is a method of encoding. Encoding converts data from one format into another. Percent-encoding provides an escape character, or a “%” symbol, which allows data to be represented using ASCII characters in URLs and text messages. The most common use for percent-encoding is in URLs and text messages.
In other words, the term URL encoding is used to describe the process of converting text into a format that can be read by an Internet browser. It is also called "percent encoding" because each time an ASCII character is added to the text, the percent sign (%) is appended to it. For example, if someone wanted to encode "hi:" as a URL, they would type "hi%3A".
URL decoding is the opposite of URL encoding; this means that it takes encoded data and decodes/decompiles it back into readable plaintext.