In a
recording studio:
There are two kinds, or definitions, of normalization.
The first is in relation to the mixing console, or desk. Normalization is the process of returning all the knobs and faders to their "at rest" position. For most studios, this means bringing everything to "zero" (whether it be "hard left," "12 o'clock," or any place else), or, if zero doesn't exist for that item (such as a frequency selector on an in-board EQ), then 12 o'clock is the typical position. The exact state of a normalized board, however, varies slightly from studio to studio. One studio, for example, might see nothing wrong with leaving the aux sends up.
Normalization is also a digital process which analyzes a particular digital music file, and raises its gain so that the loudest peak of the file will happen at digital zero, the loudest possible volume before the onset of distortion. This is often done during mastering.