Transform coding is a type of data compression designed for "natural" data like audio signals or photographic images. The transformation is typically lossless (perfectly reversible) on its own but is used to enable better (more targeted) quantization, which then results in a lower quality copy of the original input (lossy compression).
In transform coding, knowledge of the application is used to choose information to discard, thereby lowering its bandwidth. The remaining information can then be compressed via a variety of methods. When the output is decoded, the result may not be identical to the original input but is expected to be close enough for the purpose of the application.