I'll cite a .doc file here, it's also available on the Developers page:
> 1. Codes only need to be accurate enough for public, every-day use. At the human scale, when you are within a few meters of a destination, you are “there”.
> 4. People live within a “country context”. Addresses seldom include a country name. Unless clearly stated otherwise, they can safely be assumed to be in “this” country. Codes that are known to be within a particular territory can be designed to be much shorter. For example, every location in The Netherlands can be uniquely specified with at most 6 letters . Even in a large country like India, at most 7 letters are needed.
> 6. Short codes are reserved for areas where the population density is high. For example, every locations in The Netherlands can be represented by a unique 6-letter mapcode. However, the majority of the population is concentrated in a dozen urban areas totaling less than 3,000 km2 (1,800 square miles). By reserving the 5-letter mapcodes for these areas, half the population of The Netherlands can be found using 5-letter codes. On average, mapcodes for relevant locations in The Netherlands are thus closer to 5 letters than to 6 letters. In fact, a significant percentage of the population can be found in 100 km2 of city centers, which can be covered by 4-letter mapcodes.
> Based on these ideas, we envisaged a system that would work anywhere on Earth, and would (on average) provide the shortest possible codes to everybody. By using massive amounts of data gathered over the past 30 years by mapping company Tele Atlas (merged into the TomTom Group in 2008), a data table was constructed ...
> Finally, on top of any and all national mapcodes a location may have, it also always has a 9-letter, context-less map code.
> To understand mapcode accuracy, you need to understand that a specific mapcode defines a specific location X, but represents all the locations within a certain distance meters of X. For example, the Dutch mapcode “49.4V” decodes into coordinate 52.376514, 4.908542. This does not only mean that coordinate 52.376514,4.908542 can be represented by mapcode 49.4V, but that all coordinates within roughly 5 meters of that coordinate can also be represented by mapcode 49.4V.
(it continues to describe "high-precision mapcodes")
Why did they make it?
> The mapcode system was revived and worked out in 2006 when TomTom decided to expand their operations to countries like India and China. It was difficult to sell navigation devices in these countries, among other things because a significant part of the population lives without address, lacking not just house numbers but often even street names, which often made it hard or even impossible to enter a destination. It was thought that the introduction of a simple and ubiquitous system for representing locations (and hence destinations) would in due time make navigation devices as welcome there as anywhere else.
