The 180 degree rules of filming

The 180° rule is a basic guideline in film making that states that two characters (or other elements) in the same scene should always have the same left/right relationship to each other. If the camera passes over the imaginary axis connecting the two subjects, it is called crossing the line. The new shot, from the opposite side, is known as a reverse angle.

(This definition has been taken from Wikipedia)

This is a youtube video with detail explaination how does the 180 degree work. A good example of two people stand facing each other and talking, the camera should only be placing at one side of the action. We should not break the rule, as it will become both charactors will face the same side, this will make our audiences confused.

Examples

In the example of a dialogue between two actors, if Owen (orange shirt in the diagram) is on the left and Bob (blue shirt ) is on the right, then Owen should be facing right at all times, even when Bob is off the edge of the frame, and Bob should always be facing left. Shifting to the other side of the characters on a cut, so that Bob is now on the left side and Owen is on the right, will disorient the viewer, and break the flow of the scene.

In the example of an action scene, such as a car chase, if a vehicle leaves the right side of the frame in one shot, it should enter from the left side of the frame in the next shot. Leaving from the right and entering from the right will create a similar sense of disorientation as in the dialogue example.

An example of sustained use of the 180 degree rule occurs throughout much of The Big Parade, a 1925 drama about World War I directed by King Vidor. In the sequences leading up to the battle scenes, the American forces (arriving from the west) are always shown marching from left to right across the screen, while the German troops (arriving from the east) are always shown marching from right to left. After the battle scenes, when the weary troops are staggering homeward, the Americans are always shown crossing the screen from right to left (moving west) and the Germans from left to right (moving east). The audience's viewpoint is therefore always from a consistent position, in this case southward of the action.

Problems caused and solutions

The 180 degree rule enables the audience to visually connect with unseen movement happening around and behind the immediate subject and is important in the narration of battle scenes. The visual disjointedness of the battle scene on Geonosis in the Star Wars film Attack of the Clones is an example.
Avoiding crossing the line is a problem that those learning filmcraft will need to struggle with. In the above example with the car chase, a possible solution is to begin the second cut with the car driving into frame from the "wrong" side. Although this may be wrong in the geographic sense on set, it looks more natural to the viewer. Another possibility is to insert a "buffer shot" of the subject head-on (or from behind) to help the viewer understand the camera movement.
(This information has been taken from Wikipedia)