Why do we have to normalize?

Normalization is necessary because if you do not do it then the overall integrity of the data stored in the database will eventually degrade.  Specifically, this is due to data anomalies.  These anomalies naturally occur and result in data that does not match the real-world the database purports to represent.

Anomalies are caused when there is too much redundancy in the database's information. Anomalies can often be caused when the tables that make up the database suffer from poor construction. So, what does "poor construction" mean? Poor table design will become evident if, when the designer creates the database, he doesn't identify the entities that depend on each other for existence, like the rooms of a hotel and the hotel, and then minimize the chance that one would ever exist independent of the other.

The normalization process was created largely in order to reduce the negative effects of creating tables that will introduce anomalies into the database.

There are three types of Data Anomalies: Update Anomalies, Insertion Anomalies, and Deletion Anomalies.

Update Anomalies happen when the person charged with the task of keeping all the records current and accurate, is asked, for example, to change an employee’s title due to a promotion. If the data is stored redundantly in the same table, and the person misses any of them, then there will be multiple titles associated with the employee. The end user has no way of knowing which is the correct title.

Insertion Anomalies happen when inserting vital data into the database is not possible because other data is not already there. For example, if a system is designed to require that a customer be on file before a sale can be made to that customer, but you cannot add a customer until they have bought something, then you have an insert anomaly. It is the classic "catch-22" situation.

Deletion Anomalies happen when the deletion of unwanted information causes desired information to be deleted as well. For example, if a single database record contains information about a particular product along with information about a salesperson for the company and the salesperson quits, then information about the product is deleted along with salesperson information.