A range in a worksheet is an area of cells. A range can be a single cell or many rows tall by many columns wide. When a range of cells is used in many of your formulas, it is a good idea to give that range a name so that you can refer to it more easily throughout your workbook. Particlularly if your workbook is shared with anyone else, it can greatly ease their understanding of what you are doing in formulas.

#1)
First, let's look at an area of cells (a range) that might be used frequently in a workbook:
So let's say this warehouse data is used frequently in other formulas in this worksheet and perhaps in other worksheets within this workbook. And let's say we typically refer to it simply as our "apple inventory".
Typically when named ranges are used in formulas, the named range would include the column headers and the data. In fact, many Excel functions that perform calculations on ranges of cells require that the column headers be included in the range for the function to calculate properly. So, here, our range would be B4:E11. This is the location of our "apple inventory" data.
#2)
Now let's refer to the range in a function:

Here, we use the VLOOKUP function to return the number of apples on hand at the Quincy warehouse. Note that the lookup range specified in the function is B4:E11, the range shown above.

That's fine, but what if that range is referred to many times throughout the workbook? Let's name the range below.

#3)
The easiest way to name a range:
Note:
Range names are not case sensitive and can be up to 255 character but no spaces. See below for the full naming rules.
#4)
Now let's go back and use the named range in our VLOOKUP function:

Here, the VLOOKUP function refers to the same data as above but uses the new named range "AppleInventory".

Again, if this range is referred to several times throughout the workbook, naming it can greatly increase readibility and usability.

#5)
Another way to name a range:
#6)
Rules for naming ranges:
Valid Characters The first character of a name must be a letter, an underscore character (_), or a backslash (\). Remaining characters in the name can be letters, numbers, periods, and underscore characters.
Reserved Characters You cannot use the uppercase and lowercase characters "C", "c", "R", or "r" as a defined name, because they are all used as a shorthand for selecting a row or column for the currently selected cell when you enter them in a Name or Go To text box.
Cell References Disallowed Names cannot be the same as a cell reference, such as B$50 or R3C3.
Spaces Are Not Valid Spaces are not allowed as part of a name. Use the underscore character (_) and period (.) as word separators; for example, Apple_Sales or Apple.Sales.
Name Length A name can contain up to 255 characters.
Case Sensitivity Names can contain uppercase and lowercase letters. Excel does not distinguish between uppercase and lowercase characters in names. For example, if you created the name Inventory and then create another name called INVENTORY in the same workbook, Excel prompts you to choose a unique name.

Summary

Using named ranges in Excel can greatly increase the usability and understandability of a workbook. A range in a worksheet is an area of cells. A range can be a single cell or many rows tall by many columns wide. When a range of cells is used in many of your formulas, it is a good idea to give that range a name so that you can refer to it more easily throughout your workbook. There are a few ways to name a range, the easiest method is generally method above.