What does "encoding" mean?

Roughly, to encode a dimension, such as race or sex, is to notice and remember it (you need not be consciously aware that you are doing this, however). For example, you might have forgotten your new neighbor’s name and everything else about her, but if you had encoded her sex and race, you would remember that she was (say) female and white. Although psychologists sometimes distinguish between encoding and categorization, we use them interchangeably in the paper because both seem to contribute to our results.