PhotoModeler uses the marks in multiple photographs to determine where a point is in three dimensions. When you mark a point or a line in a photograph, you need to mark the same point or line in all photographs in which it appears. PhotoModeler needs to know that these are the same points; it cannot infer that information from the photographs.
For example, if you were measuring an automobile and had taken four photographs of it, then the headlights would show up in two of the photographs. You would mark the outline of the headlights in both photographs and then tell PhotoModeler, using a process called "referencing", to associate the points on one photograph of the headlight to the points on the other photograph of the same headlight.
The section on Referencing describes these steps. Single photograph projects based on control points do not require this step.
Note that in a single photo project a different method of calculating 3D is used and this referencing step is not required but the addition of Constraints is.