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An iteration is a step in a repetitive process or a single stage of a reoccurring sequence. In its first usage, iterations are a single complete stage of a process that is repeated, in its entirety, over and over again. This use is common in naturally-occurring phenomena and mathematics — basically, any system where sequences occur spontaneously. The second definition is broader and describes repetitive situations. For example, a manufacturing iteration may refer to all of the cars of a specific make and model made during a single year; the years before and after are separate iterations of the same processes.
The cornerstone of iteration is repetition. In order for a process to be iterative, it has to happen over and over. This may be just a long series of single actions, or it could be a nearly infinite sequence. In either case, the repeated sequences must be identical or nearly the same; otherwise, they are simply related occurrences.
When iterations refer to a repetitive process, it can describe anything that happens, without outside interaction or influence, every single time. An example of this form of iteration is planet revolution. When the Earth revolves around the sun, the moon around the Earth, and the Earth around its axis, it all happens automatically and without fail. While there was a time when this process wasn’t happening, and there will be a point where it stops, the sequence is near infinite from a human standpoint. Each of these occurrences, such as one complete rotation around the sun, is one iteration of revolution.
The second definition has a much wider scope. In this case, iterations are any sequence that follows after another sequence to which it is similar. This type of iteration is common in manufacturing and science and other human-made situations. In manufacturing, an iteration is the creation of a group of products that has been made before or will be made again. It doesn't matter what the product is or whether each version of the product is exactly the same, it just needs to be similar.
In the sciences, iteration forms the basis of experimentation. When an experiment is conducted and the data is gathered and interpreted, that is one iteration. The next step is to look over all the accumulated data and find out where methods can be improved or the experimental hypothesis could be changed to accommodate the new information. When the experiment is performed again, using the first stage as a base, that is the second iteration.