A rotary encoder, also called a shaft encoder, is an electro-mechanical device that converts the angular position or motion of a shaft or axle to an analog or digital code.
There are two main types: absolute and incremental (relative). The output of absolute encoders indicates the current position of the shaft, making them angle transducers. The output of incremental encoders provides information about the motion of the shaft, which is typically further processed elsewhere into information such as speed, distance, and position.
Rotary encoders are used in many applications that require precise shaft unlimited rotation—including industrial controls, robotics, special purpose photographic lenses, computer input devices (such as optomechanical mice and trackballs), controlled stress rheometers, and rotating radar platforms.
Read more about Rotary Encoder: Absolute and Incremental Encoders, Incremental Rotary Encoder, Sine Wave Encoder, Encoder Technologies