A Reference contains a Row ID of a specific List. This is used to create one to many, or many to many relations between lists in a datamodel. Or it is used to (temprorarily) keep a handle to one specific Row in a List (Current-User, Current-Product) with which you can access all properties of that List Item using the De-Reference operator (->): [CurrentUser]->[UserName]
It can also be used with a Reference Container Block in the Template Editor to access all properties of the specific List Item to display and use on the template, to easily display multiple fields without repeating the De-Reference operator in multiple labels.
An unknown value is written as UnknownEntityReference.