Terrain Levels
One star terrain indicates that a cache lies on paved ground and anyone, even in a wheelchair, can reach it. At two stars, a cache may take up to a two-mile hike, and doesn't deviate from marked trails. Three-star terrain means a cache may lie off a trail, require over two miles of walking or has steep elevation changes. Four-star caches have heavy overgrowth, steep climbing or require over 10 miles of hiking. The five-star terrain rating indicates a cache requires specialized equipment, such as SCUBA gear.
Half Stars
In addition to the five basic terrain levels, you can pick half-star levels anywhere between one and five. These provide nuance when your cache may technically merit a higher rating -- for example, four stars for a 10-mile hike -- but isn't as difficult as that rating would indicate, as in a 10-mile hike along an easy trail. In this case, you could pick a 3.5 star rating instead.
Automatic Rating System
Visit the Geocache Rating System page (link in Resources) for a guided way to rate both the terrain and the difficulty of your cache. This page will ask questions about your cache, such as the type of trail, how much overgrowth the path has, and elevation. Always select your choices based on the most difficult part of the journey. Submit the form to receive a suggested rating for your cache. You don't have to use this rating if you disagree with it.
Effect on Difficulty
The difficulty rating, though separate from the terrain rating, also changes based on the required physical exertion. Though you can rate a cache at one star for difficulty and four for terrain if it requires a long trek but then appears in plain sight, the difficulty rating rubric also includes physical factors as well as trickiness. A cache that requires heavy manual labor to reach rates as a high difficulty, even if it isn't hard to locate.