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What does collation mean in SQL, and what does it do?

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Collation can be just considered as sort order.

In English (and it's strange cousin, American), collation can be a simple matter consisting of ordering by the ASCII code.

In European languages with all their accents and other features, collation changes. 

For example, though the different accented forms of a may exist at disparate code points, they may all need to be sorted as if they were the same letter.

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