Relative dating falls under the sub-discipline of geology known as stratigraphy. Stratigraphy is the science of rock strata, or layers. Layering occurs in sedimentary rocks as they accumulate through time, so rock layers hold the key to deciphering the succession of historical events in Earth’s past.

The fundamental principles of stratigraphy are deceptively simple and easy to understand, but applying them to real rocks and fossils can be quite challenging. Here are the four fundamental principles of stratigraphy that form the foundation of our understanding of Earth’s history:

• The Principle of Original Horizontality: When sediments are laid down on Earth’s surface, they form horizontal or nearly horizontal layers. This means that non-horizontal rock layers were tilted or folded after they were originally deposited.
• The Principle of Lateral Continuity: Rock layers extend for some distance over Earth’s surface—from a few meters to hundreds of kilometers, depending on the conditions of deposition. The point is that scientists can relate layers at one location to layers at another. This is critical for stratigraphic correlation (see below).
• The Principle of Superposition: As layers accumulate through time, older layers are buried beneath younger layers. If geologists can determine which way was originally “up” in a stack of layers, they can put those strata in the correct historical order. (Rarely, after a sequence of layers has been deposited and compressed to form rock, it may be literally overturned by thrusting of the Earth’s crust as continental plates collide. In these rare places the youngest rocks in a sequence are on the bottom, but such overturned sequences can be identified by the extensive faulting and breaking of rocks, and because the same original sequence of rocks is frequently present elsewhere in undisturbed order.)
• The Principle of Faunal Succession: This principle is attributed to William Smith, an English engineer in the late 1700s. Smith noticed that the kinds of fossils he found changed through a vertical succession of rock layers, and furthermore, that the same vertical changes in fossils occurred in different places. Using the fossils collected from rocks in one part of England, Smith could predict the succession of rocks and fossils in other parts of England. The observation that fossils change in a consistent manner through stratigraphic successions can be extended to the entire world. Smith’s discovery formed a key line of evidence for evolution (it predates the birth of Charles Darwin in 1809), but it is an observed property of the rock record and is independent of natural selection, Darwin’s proposed mechanism of evolution.

Relative dating of rocks and fossils from an area is based on the Principle of Superposition, which enables scientists to put historical events in order. Relating the succession of events in one region to those in another requires that the two areas be stratigraphically correlated. Correlations can be made by tracing rock strata from one area to another by using the Principle of Lateral Continuity or by relating the fossils of the two areas using the Principle of Faunal Succession.

The Grand Canyon as an Example of the Principles of Stratigraphy
The Grand Canyon spectacularly exposes rocks spanning hundreds of millions of years of Earth’s history.
Many of the rock layers exposed in the walls of the Grand Canyon have not been disturbed by mountain building or other forms of deformation since they were originally laid down on Earth’s surface. This is an example of original horizontality. Some older layers, however, have been tilted; the surface where these tilted layers are overlain by undeformed strata is called an angular unconformity.

Many of the undisturbed formations can be traced from one end of the Grand Canyon to the other, a distance greater than 435 kilometers (270 miles). This is an example of lateral continuity. Some of the same formations are also exposed hundreds of miles farther away in other parts of the Southwest.

The oldest rocks in the Grand Canyon are exposed at the base of the gorge and are late Proterozoic. These rocks are overlain by younger Paleozoic-age rocks. This is an example of superposition: In a pile of sediment, the oldest deposits are at the bottom of the pile, underneath younger deposits.

Each major layer of sedimentary rock in the Grand Canyon contains different types of fossils. The succession of fossils in the Grand Canyon is consistent everywhere in the canyon and is also similar to the succession of fossils in other parts of North America and on other continents. This is an example of how the principle of faunal succession has been used to recognize that the Grand Canyon includes rocks from the Cambrian, Devonian, Mississippian, Pennsylvanian, Permian, and other geologic periods (each characterized by different fossils).

Biostratigraphy
Correlation based on fossils is the focus of biostratigraphy. Most species live only for a few million or tens of millions of years before they become extinct or evolve into new species. This fact implies that rocks containing fossils of the same species were probably formed within a few million years of one another. The more species that can be matched in this way, the more precise the estimate of the relative age of a rock layer. Organisms with high turnover rates (meaning that new species appear very rapidly and last for a short period of time) and a high likelihood of being preserved as fossils are ideal for biostratigraphy. Graptolites and conodonts are good examples from the Paleozoic, and mammals, foraminifera, and pollen are often used for biostratigraphy in Cenozoic rocks.

By using the four principles of relative dating, geologists can compile a detailed sequence of events based on relative time. The process is not always straightforward, however, because the geologic record is often discontinuous. Rock layers representing a particular time may be missing from an area because no sediment was deposited there at that time, or because sediments that were deposited were eroded. Furthermore, fossils may be absent or poorly preserved, and interpretations of evolutionary relationships within fossil groups may be incorrect. If sediments were deposited in different environments (such as land and oceans) comparison is difficult because most organisms are adapted to a relatively narrow range of environmental conditions.

Until the advent of radiometric dating, there was no independent way to test the accuracy of relative dating of sedimentary sequences. In stratigraphic sections around the world radiometric dating techniques have verified the relative ages of sedimentary rocks that had been determined long before from the fossils they contained.

Rocks whose ages have been determined by absolute dating can be incorporated into a succession of strata determined by relative dating. Then geologists can use correlation to infer the ages of rocks and fossils that cannot be directly dated.

Source: http://paleobiology.si.edu/geotime/main/foundation_dating2.html