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If I turn wi-fi on, the gps reading becomes very accurate. However, if it is off, the location has a error margin of even 2-3miles. How does having wi-fi help, even if I did not connect to any network? Do this networks broadcast their position, and where is stored the position for each router?

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On what device? Smart phone or laptop? – Henk Jul 14 '12 at 8:12
smartphone. How can it determine the location based on nearby networks? it must know the routers position to do this.. – Ryan Jul 14 '12 at 11:40

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No, that's not how it works.

When you have an Internet connection, you can download DGPS data from the Internet. DGPS data provides corrections for satellite position errors, satellite clock errors, and variations in atmospheric propagation that reduce GPS accuracy. In the United States, these corrections come from the NDGPS initiatives. Other countries have similar projects.

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I am inside my house. I turn on wireless on my android device, and it locates me, even though I dodnot connect to my network. On the other hand it I turn wifi off, the accuracy is very bad (2-3miles off). So I assume it is because of the wireless networks the device sees – Ryan Jul 14 '12 at 11:44
I don't follow you. What changes when you are inside your house? If you don't connect to the network, why do you think it has anything to do with the network? – David Schwartz Jul 14 '12 at 11:48
I doubt that any phone would have DGPS. It's more something found on ships. Phones have AGPS for starting quicker. – Henk Jul 14 '12 at 13:25
well because if I turn wifi off on the phone, the accuracy is 3 miles. – Ryan Jul 14 '12 at 16:35
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The big companies all use a system of collecting WiFi APs with their positions.

I have an IPad without GPS and it still can tell me where I am most of the time. But in the center of my house (only my own AP visible) it used to think I was still at my old address.

So Yes, there is a database with the location of Wifi stations. Multiple databases actually.

And you have a pretty weak GPS signal.

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