File referencing allows you to populate a scene with objects originating from external files, without actually importing those files into your scene. This allows you to keep scenes separated into pieces which can be modified independent of the main scene.
File referencing is especially useful when working with large scenes since it allows multiple artists to work on various pieces of the scene simultaneously.
File Referencing also allows you to set up proxies to stand-in for particularly dense or system intensive objects to improve playback performance. You can also export edits you’ve made to file references so that you can apply them to other references later in the pipeline.