They are images stored in a graphics format that contains geographic coordinate information, which "maps" the individual images (e.g. aerial photographs, satellite images) to the surface of the real world. This enables the image to be used as an overlay or theme object in a Geographic Information System. Some images include a geographic coordinates system and others require a header containing that information. Such headers are called World files.
Image files can be made into geo-referenced image formats by the addition of a header (World file), which requires exact knowledge of the image dimensions and its proper location on the earth's surface.
AutoCAD® vanilla cannot insert image in geo-referenced type. For doing this, some software must be purchased like AutoCAD® MAP. Alternatively, it can be done manually by editing World files with a text editor, calculate the Insertion point whit the coordinate and image pixel, than by inserting the image with the correct coordinate system one by one.
Geo-Referenced Image Insertion is a great alternative that let you do that. It offers you the ability to even import batches of images in a single operation, that will save you lot of time.