Version History has got to be one of the most important document management features in SharePoint. Just like a time machine, Version History allows you to go back in the history of a given document or an item.
When versioning is enabled in a list or library, you can store, track, and restore items in a list and files in a library whenever they change. Versioning, combined with other settings, such as checkout, gives you control of the content posted on your site. You can also use versioning to view or restore an old version of a list or library.
Document collaboration, co-authoring, and List updates with human beings is much better with Versioning enabled. People make mistakes, and Versioning provides the safety net.