An uncirculated coin refers to the condition of a coin that indicates that it has never circulated in the regular money supply in the economy. In other words, the coin shows no signs of wear on any of its surfaces. Since most modern coins are mass-produced in large quantities, it is common that the coin may have small nicks and scrapes on its surface from the production process and being transported in bags and bins. These minor imperfections are not from circulation and hence the coin is still considered an uncirculated coin.
Taking into account the concentration and amount of these minor imperfections, a coin is graded accordingly. Uncirculated U.S. coins are graded from MS-60 (a lot of marks and imperfections) to MS-70 (a perfect coin with no marks). World coins are graded as Uncirculated (considerable amount of marks), Brilliant Uncirculated (just a few minor marks) and Gem Brilliant Uncirculated (virtually no marks visible).