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Non-Linear Editing is the process of editing footage in any order you like because you can move scenes and shots around at will (an NLE is a Non-Linear Editor, often software like Avid, Final Cut, and Premiere).
Do not be fooled: If you are working with computers, you are likely using an NLE system. Linear editing is when you can not go back and make changes after you have made a cut. Such a system would be if you were using your camcorder and a VCR to edit.It is important to note that some free software is Linear, in a sense. As you build the timeline some programs require you to go back and redo everything after the point of a change. Thus, the system is Linear.