Reformat refers to the process that permanently erases all data that is on a hard drive of a dedicated server or VPS, and then installs a new copy of the operating system. It is useful if you are changing from Windows to Linux or if you have lost your Windows Administrator password [for example].
Reformatting is another reason why it is recommended to keep a current backup on a separate hard drive. When a hard drive is reformatted all data on it is wiped, so before requesting a reformat of your dedicated server or VPS it is always suggested to first download backup copy of any important data that you have on it.
