Using a four figure grid reference to describe a location map

A key skill to learn is to be able to calculate an accurate grid reference from a map. This helps when planning a walk, so you know your location. A grid reference is a universal language to describe your position on the ground within Great Britain. Today, using a map and a key 6 Blue had to describe the location of symbols on a map using the grid reference.

How do you read a grid?
When would you need to use these skills?
Why would the four figure grid help mountaineers?