What is character encoding?

In a nutshell

Computers only understand binary so all natural language characters must be converted into binary form if they are to be stored, transmitted, and rendered by computers.

Encoding is the process of assigning a number/code point to a character. There are several encoding standards such as ASCII and Unicode that provide an agreed-upon set of mappings between characters and numbers.

Check the encoding a file on Unix systems

file myfile.txt

Example output:

myfile.txt: Unicode text, UTF-8 text