What is snow-flake schema?

Answer

This is another logical arrangement of tables in dimensional modeling where a centralized fact table references number of other dimension tables; however, those dimension tables are further normalized into multiple related tables.

Consider a fact table that stores sales quantity for each product and customer on a certain time. Sales quantity will be the measure here and keys from customer, product and time dimension tables will flow into the fact table. Additionally all the products can be further grouped under different product families stored in a different table so that primary key of product family tables also goes into the product table as a foreign key. Such construct will be called a snow-flake schema as product table is further snow-flaked into product family.