The system was suggested by Tim Berners-Lee, the inventor of the web and linked open data initiator, as a way of rating the usefulness of openly-released data.
What the stars mean
No star means the data is not available under an open licence (it can't be reused without permission), even if it is available online.
★ One star means the data is accessible on the web and is under an open licence. It is readable by the human eye but not by software. This is because it is in a ‘closed’ document format (for example, a scanned image), and therefore cannot be easily reused.
★★ Two stars means that the data is accessible on the web in a structured, machine-readable format. A user can process, export and publish the data easily, but it depends on them having proprietary software like Word or Excel.
★★★ Three stars means that re-users will no longer need to rely on proprietary software (using the CSV file format instead of Excel). Users can manipulate the data in any way without being confined to a particular software producer.
★★★★ Four stars means that the data is now in the web as opposed to on a web page. This is done through the use of a Uniform Resource Identifier (URI). As a URI is completely unique, it gives a fine-granular control over the data, allowing for things like bookmarking and linking.
★★★★★ Five stars means that the data is not only on the web but is also linked to other data, fully exploiting its network effects. Through this interlinking, data gets interconnected. This means the value increases quickly in large amounts as it becomes discoverable from other sources and is given a context.