OLAP stores data in multi-dimension; it helps the user to view the data in different point of view. OLAP database is not necessarily required to be as large as data warehouse since we use only a part of data in the data warehouse to work on the analysis. OLAP can be defined as a decision support system that allows user to quickly analyze information that has been summarized into multi-dimensional views and hierarchies.
There are three main features of OLAP system :
ü Multidimensional Viewing – OLAP supports multidimensional model which consists of facts and dimensions also called as Star Schema.
ü Calculation Intensive Capabilities – Due to data is stored in facts and dimensions tables, it enables users to analyze data without much calculations.
ü Time Series analysis – Enables users to analyze data across time.
*This is just a basic idea, read more details if required.