You need to find the highest point of the ceiling, and the LOWEST point of the floor.
If you imagine starting off tiling from the highest point of the floor, say from the skirting board (you wouldn't and shouldn't - this is incorrect). And you stick your tiles on the wall level, you'll find as the skirting board drops away, as you tile around the room, keeping your tiles level would result in a gap appearing as the floor dropped-off.
A small gap means a small cut which is both time consuming and looks horrible.
Imagine the other way around, you'll tile from the lowest point of the floor, and as the skirting raises into your first row of cuts you'll end up simply trimming off that row, leaving an illusion that the first row is full tile.
Though working this out using your datum line will also tell you what the highest point is like also. As you don't want to start full tile from the lowest point and find your highest point ends up with a small cut.
So... the art of setting out is to aim to find the size of each cut, high and low, left and right (in wall examples) and the aim is to ensure all your tiles are as big as they can be around the edges, and the windows, doors, baths etc - to ensure when the job is done it looks the most pleasing.
Cutting 5mm off a 200mm tile, is easier than trying to cut 195mm of it, to save the 5mm to use.
Does that make any sense?
you should always use a datum line, though from then on you need to find your own way of working this out - a few ways are common, but every job is different. The main thing is you understand what you're trying to achieve, and spend time making sure you're sure - BEFORE you get your adhesive mixed!!!!! (or buckets out the van)