In order to better describe annotations and to differentiate them between each other, each annotation has a class, represented by AnnotationClass. An AnnotationClass is represented by two main characteristics:

name: this is the name the human picked, for example, car
type: this is the type of the annotation, for example, bounding_box.

For example, in the below image, we have 2 annotations:

an annotation with name "sun" that has the type of bounding_box
an annotation with name "car" that has the type of bounding_box

You can have multiple annotations of various types and names in the same DatasetItem (which is an image in this case), and classes can help you differentiate what types of objects you are marking.

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See the SDK documentation on this topic

AnnotationClass