The word codec is gotten from two words - Encode/Decode and a codec is just any software that is used for encoding and decoding
. In the realm of video there are different criterion which exist for video with the most well-known being the Moving Picture Experts Group standard which is more popularly known as MPEG. The MPEG standards which are most popular are MPEG-1, MPEG-2 and MPEG-4 and they set the video and audio standards for Video CD's or VCD, DVD video and Blu-Ray and HD video respectively.
Although there are various implementations and corporations that market software or hardware for encoding video, once they are using a specific standard they must always comply to the requirements of the standard. An example of two different corporations which apply a specific standard would be Microsoft and Apple which market high definition video encoding software packages that export to WMV for Microsoft and MOV for Apple.
Having seen examples of the various standards and the various kinds that might be available you are another step closer to selecting an AVI codec for your encoding or decoding requirements. But then there is something else you need to know which is that AVI itself is not a codec but a container format. A container format is simply as the name says - a container, and in video a container includes audio and video together in a single file that is played back by a player that you can install or comes pre-installed on your computer. You will also realize that AVI is one of the most popular formats for video and is supported by different devices including portable devices and some handheld devices like cellular phones.
Some people might have seen a scenario where they attempted to play a video file but could only hear audio but saw no video. This is because the player they are using can open the container format but does not have the codec installed to decode the video stream within the container however, the audio stream is still playable.
A popular codec on the internet is DivX which currently follows the MPEG4 standard and is backward compatible allowing for playback of MPEG standards made prior to MPEG4. If a video is encoded with DivX video and MP3 audio but DivX is not installed on the computer then the situation described above where there would be audio but no video may take place. In order to fix this circumstance a person may download the free DivX codec and install it to enjoy their video.
Having now touched on codecs and container formats we see that AVI is a container and may have both a video stream and an audio stream included in it. Based on your requirements after seeing what the ability of the various free and paid codecs are, you may then make your own AVI file by simply telling your encoding software to use a specific codec for audio and video and then export the finished product to the preferred AVI format.