I get that question a lot so in hopes to answer that question the following is taken from O’Reilly Press’s “Information Architecture for the Web, 2nd Edition”:
in·for·ma·tion ar·chi·tec·ture n.
1. The combination of organization, labeling, and navigation schemes within an information system.
2. The structural design of an information space to facilitate task completion and intuitive access to content.
3. The art and science of structuring and classifying web sites and intranets to help people find and manage information.
4. An emerging discipline and community of practice focused on bringing principles of design and architecture to the digital landscape.
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We use the term information to distinguish information architecture from data and knowledge management. Data is facts and figures. Relational databases are highly structured and produce specific answers to specific questions. Knowledge is the stuff in people’s heads. Knowledge managers develop tools, processes, and incentives to encourage people to share that stuff. Information exists in the messy middle. With information systems, there’s often no single “right” answer to a given question. We’re concerned with information of all shapes and sizes: web sites, documents, software applications, images, and more. We’re also concerned with metadata: terms used to describe and represent content objects such as documents, people, processes, and organizations.
Structuring, Organizing, and Labeling
It’s what information architects do best. Structuring involves determining the appropriate levels of granularity for the information “atoms” in your site, and deciding how to relate them to one another. Organizing involves grouping those components into meaningful and distinctive categories. Labeling means figuring out what to call those categories and the series of navigation links that lead to them.
 Granularity refers to the relative size or coarseness of information chunks. Varying levels of granularity might include: journal issue, article, paragraph, sentence.
Finding and Managing
Findability is a critical success factor for overall usability. If users can’t find what they need through some combination of browsing, searching, and asking, then the site fails. But user-centered design isn’t enough. The organizations and people who manage information are important too. An information architecture must balance the needs of users with the goals of the business. Efficient content management and clear policies and procedures are essential.
Art and Science
Disciplines such as usability engineering and ethnography are helping to bring the rigor of the scientific method to the analysis of users’ needs and information seeking behaviors. We’re increasingly able to study patterns of usage and subsequently make improvements to our web sites. But the practice of information architecture will never be reduced to numbers; there’s too much ambiguity and complexity. Information architects must rely on experience, intuition, and creativity. We must be willing to take risks and trust our intuition. This is the “art” of information architecture.
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In summary, we, Information Architects, are the ones behind the scenes who lay out the content and information to be found in any web site. We are the ones who make it easier for all of you the users to find what you are looking for. Our work is seen in the layout (where the navigation, images, etc, is located on a page) of a web site or system.
What’s interesting about this is that library sciences is coming back in full force because of the amount of information at our fingertips and our need to categorize and organize it all into usable chunks. Librarians were doing this long before there was a web to be concerned about.