A chip database is a compilation of individual image samples, usually measuring 256 pixels by 256 pixels or smaller. Each image sample contains an accurate geocoded location and metadata; such as which sensor it was generated from, the date it was acquired, and the viewing angle.
These image samples, called chips, can be used to collect ground control points (GCPs). You can visually match a feature in the raw image that you are georeferencing and use the coordinates from the chip database as a GCP. You can also use the chips to automate the collection of GCPs in your project.
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