Since you ask, I will answer.
Refurbished gear comes from several sources. Dealer demos, trade show demos, and customer returns being the most common. (How many of you have bought items to "evaluate" and then returned them?)
All these items get checked by a service technician for appearance and function, any glaring or obvious issues are corrected and the item is removed with proper accessories and then made available as refurbished products. Firmware updates are often, but not always installed.
Contrary to some opinions these items are NOT fully or rigorously examined and issues can be missed if a specific error or issue was not detailed in the return package. But overall refurbished items do have a better record of reliability than assembly line items which only receive random spot check inspections. Pro level gear is different as each body and lens receives a number of assembly inspections during the manufacturing process.
Refurbished are, in general, a good way to save some money over brand new. Canon provides the same one year warranty as they have on their new gear while other manufacturers limit their return to 90 day warranties. But some dealers will extend that 90 days to a full year at no extra cost.
Do keep in mind that this info ONLY relates to "Factory Refurbished" items, anything sold as "seller refurbished" is meaningless and simply states all you are getting is a used product with no verifiable warranty.
So there you go, let's the trolls descend on me as they will.