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Sanitization is the process of removing sensitive information from a document or other medium, so that it may be distributed to a broader audience. When dealing with classified information, sanitization attempts to reduce the document's classification level, possibly yielding an unclassified document. Originally, the term sanitization was applied to printed documents; it has since been extended to apply to computer media and the problem of data remanence as well.
Redaction generally refers to the editing or blacking out of text in a document, or to the result of such an effort. It is intended to allow the selective disclosure of information in a document while keeping other parts of the document secret. Typically the result is a document that is suitable for publication, or for dissemination to others than the intended audience of the original document. For example, when a document is subpoenaed in a court case, information not specifically relevant to the case at hand is often redacted.
In the context of government documents, redaction (also called sanitization) generally refers more specifically to the process of removing sensitive or classified information from a document prior to its publication, during declassification.