Imagine stair-like levels outdoors for better understanding of 'terraced' landscapes. Vineyards can also be terraced to maximize space on the hillside.
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Erosion Control
'Terraced' can imply methods used to prevent soil erosion on slopes. They terraced the hillsides to prevent the rain from washing the soil away.
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Agricultural Function
Especially in agriculture, 'terraced' indicates efficient land use on uneven terrain. Farmers have terraced the mountain to grow more crops.