A dictionary coder, also sometimes known as a substitution coder, is a class of lossless data compression algorithms which operate by searching for matches between the text to be compressed and a set of strings contained in a data structure (called the 'dictionary') maintained by the encoder.
When the encoder finds such a match, it substitutes a reference to the string's position in the data structure.
This approach is most often used when the message or set of messages to be encoded is fixed and large; for instance, an application that stores the contents of a book in the limited storage space of a PDA generally builds a static dictionary from a concordance of the text and then uses that dictionary to compress the verses.
Instead of a single index identifying a dictionary entry, two values are needed: the length, indicating the length of the matched text, and the offset (also called the distance), indicating that the match is found in the sliding window starting offset bytes before the current text.
Enhancements to LZW include handing symbol sizes other than 8 bits and having reserved codes to reset the dictionary and to indicate end of data.