Reference level
In audio systems, the reference level generally refers to the standard signal level defined by international standards. This serves to maintain compatibility between different audio equipment and systems, as well as to secure headroom and prevent distortion in audio processing.
In the case of analog systems, +4dBu (or -10dBV) is typically used as the reference level.
For digital systems, the AES/EBU standard employs -18dBFS as the reference level, while the SMPTE standard uses -20dBFS. This is generally because the difference between the RMS and Peak levels of typical instruments falls within approximately 18dB. Therefore, securing 18-20dB of headroom ensures safety from clipping. (Of course, percussive instruments like snare drums can exceed 22dB.)
In the context of 16-bit digital audio, -12dBFS is used as the reference level.
Link to Nominal level document